10 Licences and Permits Needed to Open a Restaurant
Opening a restaurant is neither a short nor a simple process.
Once you've nailed down a restaurant idea, found your ideal restaurant location, and pitched your restaurant business plan to investors, the most painstaking part of the process begins: licencing.
Acquiring all of the necessary food licences and permits involves a lot of paperwork and patience. It takes time for each and every one to be approved.
It's not fun, but it is absolutely necessary. This guide covers the licences needed to open a restaurant in the UK.
Licences and Permits Required to Open a Restaurant
- Food Business Registration
- Employer PAYE Reference
- Change of Use Permission
- Sign Permit
- Music Licence
- VAT Registration
- Planning Permission
- Alcohol Licence
- Skip Permit
- Pool Table Licence
What Do You Need to Open a Restaurant?
1. Food Business Registration
Step one: Food Business Registration. This is required to open and operate any business in the UK.
Step two: Food Premises Approval. If your business involves handling meat, fish, egg or dairy products, you must be inspected and may require approval by your local council.
How to Get a Food Business Licence
You will need to get in touch with the Environmental Health Service or local authority responsible for food safety in your area. They will require you to complete a food business registration form which is submitted either via post, in person or online, depending on the council. Note that the local authority may request to conduct an inspection of your premises to ensure that it meets food safety and hygiene standards. If everything is in order, they will approve your registration and issue you a food business registration certificate.
How Much Does a Food Business Registration Cost?
Registering a food business in the UK is generally free of charge, but make sure to confirm with your local authority's Environmental Health Service or Food Safety team.
2. Employer PAYE Reference
Like a Food Business Registration, all businesses must also obtain an Employer PAYE Reference in order to operate in the UK. This is a unique reference number assigned to an employer for tax purposes by HM Revenue and Customs (HMRC).
How to Get an Employer PAYE Reference
You can apply for an Employer PAYE Reference on the HMRC website.
How Much Does an Employer PAYE Reference Cost
Obtaining an Employer PAYE Reference is free!
3. Change of Use Permission
The procedure for obtaining a change of use permission varies depending on the specific location and local planning regulations, as well as the building's structure.
How to Get Change of Use Permission
Search for your region + change of use permission, and follow the steps on your local planning authority's website
How Much Does Change of Use Permission Cost?
The fee for a standard planning application could range from around £200 to over £500, but will vary depending on various factors, including the scale and complexity of your project.
4. Sign Permit
Your sign is an important part of building your brand as part of your restaurant marketing plan. Before you put up any signs to draw attention to your restaurant, you may need to apply for advertisement consent to display a sign bigger than 0.3 square metres (or any size if illuminated). So if you have a small sign, you are unlikely to need consent or a permit.
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5. Music Licence
Music is essential to a restaurant experience: adding to the ambiance, mood, and individual aesthetic. To play music in your restaurant, you'll need a music licence to avoid copyright infringement. This includes live music, as well as music from a CD, or streaming service.
The fines for playing copyrighted music without a licence can range anywhere from £2,00 to £4,000 plus court fees.
Plus, nobody wants to get sued by Beyoncé. To protect your business from these fines, make sure you’ve secured a music licence before you hire that DJ or host a karaoke night.
How to Get a Music Licence
You could pay the Performing Right Society (PRS) for Music directly on their sites, or get a licenced music solution that pays these fees on your behalf.
How Much Does a Music Licence Cost?
The cost can vary based on the venue and how the music is played.
6. VAT Registration
When your restaurant's taxable turnover reaches or is expected to exceed the current VAT registration threshold, you are required to register for VAT with HM Revenue and Customs (HMRC). Once registered for VAT, you will receive a VAT identification number (VAT ID) from HMRC. You will use this VAT ID for transactions with your suppliers and customers. When you purchase goods and services from your suppliers, they will charge you VAT at the applicable rate. This VAT is known as "input tax" because it is a cost to your business. As a VAT-registered business, you can recover the VAT (input tax) you pay on your purchases by offsetting it against the VAT you charge on your sales (output tax).
How to Register for VAT
You can do this online through the HMRC website. During the registration process, you'll need to choose a VAT scheme that suits your restaurant's business needs. Common VAT schemes include the Standard VAT Scheme, the Flat Rate Scheme, and the Annual Accounting Scheme. Once registered, you must start charging VAT on your taxable supplies (food and drinks) to your customers. You are required to report and pay the VAT collected to HMRC regularly, usually on a quarterly basis.
How Much Does it Cost to Register for VAT?
There is no direct cost associated with registering for VAT in the UK. Registering for VAT itself is free of charge. While registering for VAT is free, the ongoing VAT-related responsibilities and potential costs associated with VAT collection, reporting, and payment should be considered as part of your restaurant's financial planning.
7. Planning Permission
Depending on the location and nature of your restaurant, you may need planning permission from the local authority. This permission ensures that your restaurant's premises are suitable for the intended use and comply with zoning and building regulations.
In addition, if you are making significant changes to the building or carrying out structural alterations, you may need to obtain building regulations approval from the local authority or an approved inspector. This approval ensures that the construction work meets safety and building standards.
How to Obtain Planning Permission
It is recommended to work closely with the local planning authority as early as possible. Before applying for planning permission, do some research to understand the local planning policies and regulations that apply to your area. Check the local council's planning portal or website for information on planning guidelines and requirements, and consider engaging with a planning consultant or architect.
You will need to create a comprehensive proposal for your restaurant, including details about the location, size, layout, and intended use. Include plans, drawings, and any other supporting documents that help illustrate your proposed development. Before formally applying, consider submitting a "pre-application" or "pre-planning" inquiry to the local planning authority. This will allow you to get feedback on your proposal before making a full application. When ready, submit the relevant planning application form to your local planning authority. This is typically available for download from their website. You will receive a decision notice from the local planning authority, either granting planning permission, refusing permission, or granting permission with conditions. Be aware that the decision-making process can take several weeks or months, so be sure to factor this in to your timelines.
How Much Does it Cost to Obtain Planning Permission?
There may be an application fee, the amount of which varies depending on the scope and complexity of your proposal. To get a more accurate estimate of the potential costs involved in obtaining planning permission for your specific restaurant development, it is advisable to consult with a planning consultant, architect, or other relevant professionals who can provide a detailed cost breakdown based on your project's characteristics and location.
8. Alcohol Licence
If you plan to serve alcoholic beverages, you will need to apply for an alcohol licence. As a business that wants to sell alcohol on their premises, you will need to apply for a Premises Licence. Start this process as early as possible. Depending on the location, it can take anywhere from several weeks to several months to complete the application process and receive a licence from the local licencing authority.
In addition, employees who will be responsible for the sale of alcohol at your restaurant will need to hold a Personal Licence
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9. Skip Permit
Not often considered, but often needed, the skip permit allows your restaurant to situate a skip outside your kitchen, where chefs can dispose of food waste.
The stipulations and cost of the skip permit depend on the size of the dumpster, the exact placement of it, and the restaurant location.
How to Get a Skip Permit
This process varies widely city to city, so google "your city" and "skip permit" to find out the requirements of your local council. The required forms should typically be found online.
How Much Does a Dumpster Placement Permit Cost?
To find out the exact cost of a skip placement permit for your restaurant, you should contact your local council. They can provide you with detailed information on the specific fees and requirements for obtaining a skip permit.
10. Pool Table Licence
A pool table licence for the customers of your restaurant or business is not needed. The UK only requires a licence if the pool game will be viewed by spectators in a tournament or league fashion.
Licences and Permits Across the UK
As you've certainly learned throughout this article, licences and permits for restaurants vary depending on location.
Business owners need to research their own local regulations, as these all vary depending on your restaurant’s location. Generally, visiting your local council or authority's website can help you find out which permits and licences you need.
Also, be sure to keep your licence current. Some licences and permits expire after a set period of time. Keep close track of when you need to renew them — it's often easier to renew than it is to apply for a new one.
Your Next Steps
If you've been adding in your head while reading this post, you know that all in all, the process of licencing can cost well over £500 before you open doors, and should be factored into your restaurant numbers and metrics. And make sure to plan ahead, because it can take 2-3 months or even longer to get everything approved.
It’s an investment, but an exciting one — that will get you started on your way to opening up that new concept. Make sure to start with a restaurant business plan to get every step planned out.
Download your free restaurant business plan template, and if you're ready, start applying for these food licences and restaurant permits now.
These are only some of the primary licences and permits restaurants must acquire to open and operate legally. The exact laws and regulations for each licence are often specific to different cities, counties, and regions.
Make sure that you understand all of the various licences you will need specifically for your region. It can be a tedious and drawn-out process, but securing all of the necessary permits is a critical step towards opening your new restaurant and avoiding unnecessary penalties.
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