On top of finding the right premises, securing business loans, and finding staff—getting properly licensed is yet another step on the way to starting a food business.You need certain licenses before you can legally commence operations. Luckily, the UK requires relatively few licences before your business can take off.
In this blog, we explore a few.
Food business registration With an advanced commerce platform like Lightspeed, you can enjoy a leg up on your competition.
Start your business off on the right foot
With an advanced commerce platform like Lightspeed, you can enjoy a leg up on your competition.
Food business registration
Before starting a food business you will need to make sure that you are registered as a limited company with Companies House. Once registered as a limited company, you’ll then have to register as a food business at your local council. Do this within 28 day before opening your business.
Commercial buildings are classified based on their use. If your premises wasn’t previously used as a food service business, it may be under a different classification. In this case you’ll need additional planning permission from your local council to change its classification. Registering a business is completely free and cannot be refused (at least they make that part easy for you!)
Alcohol is a big part of our culture and everyday lives, and while it should be managed responsibly, leaving it out of your food business’ offering could be a big mistake. Unsurprisingly, you do need a license before you can legally sell alcohol on your premises.
But here’s the thing: there’s no single alcohol license that UK business owners can hold. In fact, you need two licences, one for your business premises (premises license) and one for you or your bar manager (personal license). Once you have both these licenses, you’re then also legally obliged to buy alcohol from suppliers approved by HMRC.
A premises license is what authorises your business to buy and sell alcohol. It differs from a personal license in that no individual can hold it, only physical locations. However that location doesn’t need to be fixed. If you’re a pop-up, food truck or a party boat, for example, you will also need a premises license.
A premises license isn’t just for alcohol either. You also need one if you plan to have evening entertainment in your restaurant, or to serve food any time between 11pm and 5am.
A premises license alone is not enough to be able to sell alcohol at your restaurant. In conjunction with a premises license, you also need a personal license. This allows certain individuals to serve alcohol on a licensed premises. When you hold it, you become designated premises supervisor.
Under your supervision, non-licensed individuals can sell alcohol on a licensed premises, provided they’re over-eighteen (and know how to make a good margarita).
How much is an alcohol license?
A personal license costs just £37, which you pay when you apply for the qualification. To pass you will also need to complete a DBS check which will cost you £25.
The cost of a premises license varies depending on the rateable value of your commercial property. Either way, you will have to pay both an application fee and an annual charge. The higher the rateable value of your restaurant premise, the higher the fees for an alcohol license will be.
See below a table of costs depending on rateable income:
Some local governments will require you to have a pavement license to place tables, chairs and other furniture on the pavement. Rules, restrictions and fees vary region to region. Certain restrictions apply on how big the furniture can be. You will also have to leave an amount of pavement space free for pedestrian traffic and clearly mark the borders of your outdoor seating area.
When applying you’ll need to supply a site plan and a public liability insurance certificate, and may be subject to fines if you fail to meet the requirement or fail to pay the license fee. The cost of a pavement license will vary by location, but it is capped at £100.
Although not technically a license or a permit, liability insurance is a legal obligation for business in the UK.
Employee liability Insurance
If you plan to have employees, you’re legally required to purchase Employer’s Liability Insurance. It helps cover compensation costs in the event that an employee becomes sick or injured at work.
The costs of employee liability insurance depends on what type of business you’re opening, its size (numbers of employees) and the amount of risks posed to employees while working there.
Public liability insurance
Public liability insurance covers claims against your cafe for damage to a customer’s possessions or accidental injury to a customer caused by you or an employee. It’s not a legal requirement for starting a business, but nonetheless good to have if something should happen to a customer on your premises.
The costs of Public liability insurance also depends on the size and nature of your business. But according to boughtbymany.com, the average across all business is £796.30 per year.
Planning to play or perform music on your premises? You’ll need a license for that too. Playing music without appropriate licenses is copyright infringement. Music can contribute heavily to atmosphere and customer experience, so applying for a music license, officially named TheMusicLicense is probably worth it.
TheMusicLicense is distributed by PPL PRS and its cost is dependent on what type of venue you are and how the music is used. PPL PRS charges tariffs based on business types. For bars and restaurants, license fees are relative to the audible area in square metres. So the larger your premises, the larger the fees (see table below.)
Get licensed, get ahead
Don’t skip the step of getting the licences you need to start your restaurant, bar, cafe or pub. It may not be the most exciting aspect of running a business, but failing to get the right licences can come back to bite you?
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