Seven Deadly Sins: The Unknown Laws That Cost Your Small Business A Fortune

A bookshop owner in the Wirral was shocked to be handed a £300 fine last month by a local authority enforcement officer who accused her of flouting strict laws on waste after she threw sweet wrappers in the bin. The officer explained that any business generating rubbish needed a waste transfer license setting out how they will dispose of trash – and since the bookshop couldn’t produce its license, it had to pay the penalty.

Technically, it appears, Wirral Council is in the right, though UK legislation on what counts as business waste, as opposed to personal rubbish, is sketchy. However, the council cancelled the fine after a public outcry, with other small businesses rallying to the bookshop owner’s support. Many insisted they had no idea they were covered by such regulation.

Such cases may be relatively rare, but the waste licensing laws are just one example of regulation that many small businesses may be flouting unwittingly. With so many rules and regulations in so many different areas, small companies are constantly at risk of falling foul of the law. Here’s seven more regulations you may not know apply to your business – and which could cost you dearly if you’re caught breaking the rules:

Hang the DJ

Are you playing music in your workplace? If so, the small print of the Copyright, Designs and Patents Act of 1988 very likely applies: it says any business that ever plays music on its premises for customers or staff is hosting a ‘public performance’. If so, they need licenses from PRS for Music and PPL, the organisations that ensure performing artists are paid when their work is played in public venues. These start at less than £100 a year, but can cost thousands of pounds for larger businesses. Still with PRS conducting spot checks pursuing civil actions and enforcement actions against businesses playing music without authorisation, not having a license could prove more expensive.

Cover your car

Any business that uses a motor vehicle for work must have motor insurance that specifically covers the vehicle for this purpose – even if it’s the private vehicle of the owner of the business or one of its employers. As many as four in 10 small businesses affected by this regulation have failed to buy the right type of cover according to research conducted by insurance company Axa – they’re all vulnerable to legal action.

Fine mess: don’t get caught out by unknown regulationGETTY

Drop the junk mail

Since 2003 it has been illegal in the UK to send unsolicited direct marketing emails or text messages to individuals unless they have expressly agreed to receive this type of communication from your business. If you haven’t got permission to send such materials, you’re breaking the law – in theory the recipient may be able to claim damages from your business.

Get licensed

One in three small businesses has no idea what software packages they use in the workplace according to the Business Software Alliance. That may well mean their software isn’t properly licensed by the publisher, or even that they’ve bought counterfeit or pirated goods. Ignorance is no defence in intellectual property regulation – if you can’t show you’ve got a license to use the software on your computers, you could face enforcement action.

Display your certificates

The law requires all employers to take out employees’ liability insurance for at least £5m. This cover pays out in the event that one of your workers is injured at work or falls ill as a result of the work they do for your business. Not only must you have this cover in place but also, you have a legal obligation to display your insurance certificate in a location where employees can see it.

Enforce the smoking ban

Since 2007, the UK has enforced a ban on smoking in almost all enclosed places of employment and public spaces. But it’s not enough simply to have banned smoking on your premises – you must also display no-smoking signs that meet set criteria at every entrance. The exact rules vary according to whether the building is used by employees only or members of the public too.

Christmas crackdown

In the retail business? If so, it can be tempting to stock your shop with seasonal merchandise, but don’t fall foul of age restriction rules. Everyone understands that under-18s are banned from buying alcohol, but did you know that you can’t legally sell Christmas crackers to anyone under the age of 12?