Public house legal issues

Pint of beer on bar side underneath taps

The licensed trade is subject to a significant amount of regulation and it's very important to get specialist help to make sure you comply with all the legal requirements. The following is an outline of some of the areas that are likely to be relevant to you.

What licences does a public house need?

To operate as a pub providing a typical range of products and services there are a number of licences you will have to obtain.

Alcohol and entertainment licensing

In England and Wales, the Licensing Act regulates the sale of alcohol, the provision of regulated entertainment and the supply of hot food between the hours of 11pm and 5am. A premises licence is required for any premises where these activities will take place (although in some cases late night refreshment may be exempt from the licensing requirement), and a personal licence is required by anyone who wants to sell alcohol from premises which have a premises licence.

Venues do not need to be licensed to provide amplified live music between 8am and 11pm as long as the audience is no more than 500 people. The provision of unamplified music between 8am and 11pm no longer needs a licence at all, regardless of audience size. For providing all live music outside these hours, or amplified live music (including DJ sets) within these hours but to more than 500 people, either your alcohol licence will need to include the performance of live music as a licensable activity or you'll need to get a temporary event notice every time you put on a live music event (as a personal licence holder you can have up to 50 a year). The website includes more information about alcohol, regulated entertainment and late night refreshment licensing.

In England and Wales, mandatory licensing conditions ban irresponsible drinks promotions and require alcohol retailers to put in place an age verification policy.

A similar regime of personal and premises licences and licensing conditions is in operation in Scotland as well. There is comprehensive information for licensees on the Scottish Government website.

In Northern Ireland, alcohol licences are granted by the county court. There is a set number of pub licences in Northern Ireland and new licences are not currently granted for pubs. So you'll usually need to find someone who's giving up or selling their licence. You can read more about alcohol licensing in Northern Ireland on the NI Direct website.

Alcohol wholesaler registration scheme (AWRS)

If you plan to sell alcoholic drinks to other businesses on anything other than an 'incidental' basis (sales that you don't solicit, or that you are not aware are trade sales) you will need to register with HMRC as an alcohol wholesaler. HMRC will make checks to ensure that you're a 'fit and proper' person to operate as an alcohol wholesaler - for example that you have never been involved in illicit trading of smuggled goods. You'll need to apply online for registration at least 45 days before you start trading. You can find out more on the website.

Door supervisors

The government has set up the Security Industry Authority (SIA) to regulate the security industry throughout the UK. Door supervisors can only work legally if they are licensed by the SIA. To obtain the licence, an applicant has to pass an identity check and a criminal records check and must have gained a recognised door supervisor qualification. Check out the SIA website for further information.

Food premises

If you plan to offer any catering you must register as a food business with your local authority environmental health department 28 days before you start your food operations.

Gaming machines

Depending on the number of gaming machines you have, you may need a gaming machine permit from your local licensing authority. In Great Britain, your alcohol licence automatically entitles you to have two Category C or Category D machines. If you want to offer more than that number, you need a gaming machine permit. In Northern Ireland, your alcohol licence entitles to a certain number of gaming machines. There's no set maximum, but the licensing authority will decide how many you can have when you apply for your licence.

You'll need to register with HM Revenue and Customs (HMRC) if you have machines on which Machine Games Duty (MGD) is payable. The website sets out the position.

Other licences

You may also need a number of other licences, including:

  • a Music Licence from PPL PRS Ltd. An MPLC licence if you plan to screen films or TV shows
  • a television licence to cover televisions in the bar areas and also in rooms that you let out
  • registration with the Information Commissioner's Office (ICO) if you use a CCTV system

Alcohol licensing legislation

The sale of alcohol is regulated by:

  • the Licensing Act in England and Wales
  • the Licensing (Northern Ireland) Order
  • the Licensing (Scotland) Act in Scotland

If you intend to sell alcohol you'll need to obtain the appropriate licences and comply with the terms of the legislation. You can find out more information about alcohol licensing throughout the UK from:

  • the website
  • NI Direct in Northern Ireland
  • the Scottish Government

The British Beer and Pub Association website includes some useful information about alcohol licensing and conditions.

Gaming machine legislation

Coin operated amusement machines offering games of chance are subject to gaming legislation. Under the terms of the Gambling Act, in Great Britain you can provide up to two gaming machines in your premises (category C and/or category D machines). You must notify your local licensing authority that you intend to provide a maximum of two machines. If you want to provide more than two machines, you must apply to your local licensing authority for a licensed premises gaming machine permit. In Northern Ireland your alcohol licence entitles you to a certain number of gaming machines. The licensing authority will decide how many you can have when they grant the licence. You can find out more about gaming legislation in Great Britain on the Gambling Commission website. The Department for Communities website has information about gambling laws in Northern Ireland.

With some exceptions, gaming machines are subject to Machine Games Duty (MGD) and you will need to register with HM Revenue & Customs (HMRC). There is more information on the website.

Public payphones

Payphone providers must make sure that the payphone provides access to certain basic services such as emergency numbers and operator assistance. You must also display certain information beside the phone. BT Business provides a managed payphone service which covers installation, servicing and emptying the cashbox. Contact BT for more information.

Weights and measures

Legislation covers the quantities in which alcoholic drinks are sold. You must make sure that your customers know they can buy beer, wine and spirits in small measures. Contact your trading standards office for full details.

Describing your products

So that customers know what they are buying before they order an item of food and drink, you should display the following information about your products:

  • main characteristics - for example a description of a drink or food item
  • the price, including VAT and any additional service charge
  • the quantity - the size of a drink or portion of food

There's a great deal of detailed information about trading standards and consumer protection legislation, including specific information for the licensed trade and other information on particularly relevant topics, on the Trading Standards Business Companion website.

Spirits duty paid tax stamps

All bottles of spirits and made wine above 30% alcohol by volume must have a tax stamp on them to prove that UK duty has been paid on them. It is illegal to hold in stock or to sell any bottle that is not marked in this way.

Workplace smoking ban

Smoking is not permitted in public places, including pubs. You must display appropriate 'No Smoking' signs. Many pubs have constructed extensive outdoor shelters for smokers but if you intend to do the same, bear in mind that the regulations say that these can't be either 'enclosed' or 'substantially enclosed'. It's also likely that the addition of a shelter will need planning permission. The legislation varies slightly in different parts of the UK so if necessary contact your local authority for details of how the ban affects you.

Note that the workplace smoking ban does not currently apply to 'e-cigarette' vaporisers, and it is up to individual pubs to decide on their own policy regarding these.

Employment matters

Anyone employing staff must comply with employment legislation. Important pieces of legislation which you must be aware of include:

  • The Employment Rights Act
  • The National Minimum Wage Act
  • The Working Time Regulations
  • The Transfer of Undertakings Regulations (if you take over a pub you must observe the existing staff's terms and conditions of employment)

The employing people section of the website includes information and guidance on all aspects of employment legislation. Information for businesses in Northern Ireland is available on the NI Business Info website.

Asylum and immigration legislation

Controls on illegal immigration into the UK mean that it is a criminal offence for any business knowingly to employ a person who is not entitled to live or work in the UK. Any employers who do so face an unlimited fine and/or imprisonment. Employers must check employees' documents to ensure they're valid. More information on preventing illegal working is available on the website.

Food safety

All businesses in the food sector must comply with strict food safety legislation. Before you open, you must register your business with the local authority environmental health department. Your local environmental health officer will be able to give you advice and guidance as to what you should install in your premises to make sure your operating areas are hygienic and how to comply with the requirements of food safety legislation.

Health & Safety, fire

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

To help licensed premises to deal with the increasing number of violent incidents, the Health and Safety Executive (HSE) has produced a free online violence toolkit.

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 public house

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:

  • employer's liability
  • public and products liability
  • premises, fixtures and fittings, glass breakage and stock
  • audio visual and lighting equipment
  • loss of licence
  • freezer breakdown
  • cash
  • business interruption
  • motor insurance
  • goods in transit (for example on the way back from a cash and carry)

There are a number of companies which offer policies tailored to the needs of the licensed trade. You should obtain several quotes for comparison purposes.

Members of the British Institute of Innkeeping (BII) can benefit from tailored business insurance packages.

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

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