Computer shop legal issues

Some of the key areas where legislation is likely to affect your business are listed below.

What licences does a computer shop need?

There are no licensing requirements relating specifically to retailers of computers and accessories but there are some activities that you may carry out that do require a licence or authorisation, including:

  • if you intend to offer in-store finance to customers you will need consumer credit authorisation from the Financial Conduct Authority (FCA)
  • if you play background music in the shop you're likely to need a Music Licence from PPL PRS Ltd. There is an annual fee for this which you can pay online on the PPL PRS website
  • if you sell, advise on, arrange or assist in selling general insurance (such as computer and laptop cover) you may need to be either directly regulated by the FCA or become an appointed representative of an FCA authorised principal insurer, even if insurance is only a small part of your business

Hardware and other electrical goods

Specific regulations cover the safety of many products and you must only stock goods that comply with these regulations. Your suppliers should be able to confirm that the goods you purchase from them comply with the appropriate standards. If you are building computers yourself, it is up to you to make sure that they are compliant with electrical safety standards. There's guidance on supplying electrical equipment on the Trading Standards Business Companion website.

Software

If you intend to become involved in writing, modifying and installing software for clients, you should make sure that you are aware of the provisions of legislation aimed at protecting the copyright and intellectual property of the originator. The Federation Against Software Theft (FAST) website includes useful information on copyright as it relates to computer software.

Distributor take-back scheme for waste electrical goods and batteries

Retailers who sell electrical goods to private householders are required by law to make provision for the proper disposal of waste electrical and electronic equipment (WEEE). Those that don't offer their own in-store take-back service must join the distributor take-back scheme.

Valpak runs the national distributor take-back scheme for the UK. By signing up to the scheme, you won't have to offer your own in-store take-back service and comply with the other requirements of the WEEE regulations. Your customers can dispose of their items safely and properly at a designated local civic amenity site.

Fees for membership of the distributor take-back scheme typically range from around £400 to £1,500 a year, depending on how many items you sell each year. The largest retailers pay on a per item basis. You can find out more about the distributor take-back scheme on the Valpak website.

If you sell more than 32kg of portable batteries each year then you must join a battery compliance scheme so that you can offer your customers a free battery take-back service.

Retailing

There is a wide range of legislation that applies to retail outlets and that protects the interests of the consumer. For example, goods and services must not be misleadingly described and the retail price of goods must be clearly displayed. You will be responsible for making sure that all goods or services are fit for their intended purpose and are of satisfactory quality. There is special additional consumer protection legislation that applies if you sell things by mail order or on the internet as well as off-premises selling - for example if you deal with a client in their own home rather than at your shop. There's detailed guidance on your legal obligations to consumers, and on the requirements when selling online, on the Business Companion website.

Carrier bag charge

A 5 pence charge applies in England, but small and medium-sized businesses (with fewer than 250 full-time equivalent employees) are exempt. You can get detailed guidance from the gov.uk website.

Retailers in Wales and Scotland must charge customers at least 5 pence if they supply them with a single-use carrier bag. This applies to all types of single-use bag, whether they are made of plastic, paper or plant-based starch. There is detailed guidance on the Gov.Wales and Zero Waste Scotland websites.

In Northern Ireland retailers must charge customers a 5 pence levy on all bags with a retail price of less than 20 pence (including any bags that would otherwise be free of charge), whether they are single-use or reusable.

Health & Safety, fire

You must comply with workplace health and safety and fire safety legislation.

Employment legislation

Anyone employing staff must comply with employment legislation. Important areas of legislation include recruitment, employment contracts, pay, working hours, holidays, employment policies, sickness, maternity, paternity, discrimination, discipline, grievances, dismissals, redundancies and employment tribunals.

Insurance for a computer shop

Contact an insurer or insurance broker and explain exactly how your business will operate - they will then explain what insurance cover you must have by law, and other cover you should consider. This might include:

  • premises, premises contents
  • employers liability
  • public liability
  • professional indemnity
  • motor insurance (for any business vehicles)
  • loss of earnings

It's worth noting that the BCS Chartered Institute for IT offers its members significant discounts on professional indemnity insurance.

When comparing insurance quotes, uncover the differences between policies by using an insurance comparison form.

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