Insolvency: protect your premises licence 

It has been a very turbulent few years for the licensing trade since the COVID pandemic.  Whilst insolvencies fell to their lowest level in December 2024, that could all change in April 2025 as the new Labour Government introduces measures to include:   

– Rises to National Insurance contributions. 

– Minimum wage increases. 

– A cut in business rates support.   

As a result of these changes, it is very likely that the rate of insolvencies will grow which in turn will have a detrimental impact on the licensing trade.  

A premises licence is an extremely valuable asset for a business and, too often, not enough is done to protect a premises licence. 

s.27(3) Licensing Act 2003 – an individual becomes insolvent on: 

• Approval of a voluntary arrangement proposed by the premises licence holder. 

• When the premises licence holder is made bankrupt or (in Scotland) when the premises licence holder’s estate is sequestrated. 

• By entering into a Deed of Arrangement for the benefit of creditors or a Trust Deed for the creditors. 

s.27 (4) Licensing Act 2003 – a company becomes insolvent on: 

• Approval of a voluntary arrangement proposed by its directors. 

• The appointment of an administrator in respect of the company. 

• The appointment of an administrative receiver in respect of the company 

• If the company goes into liquidation. 

If you or your company becomes insolvent the premises licence will lapse immediately, and the licensed premises will no longer be permitted to carry out licensable activities UNLESS measures have been taken to protect the premises licence. 

If you would like more information about protecting your premises licence to avoid the risk of losing your most valuable asset (the premises licence) then please get in touch with our Licensing Team at Birketts who would be happy to advise you.