What Licence Do You Need to Start a Construction Company in the UK?
There is no single “construction licence” in the UK. Unlike some countries, the UK does not require a general building contractor licence to start a construction business. However, certain types of work, certain equipment, and certain business activities do require specific licences, registrations or certifications – and getting this wrong can mean criminal prosecution, voided insurance, or exclusion from work.
Here’s a complete picture of what you do and don’t need.
There Is No General Construction Licence
This surprises many people. You can legally start a construction company in the UK, take on contracts, employ workers and build structures without holding any specific construction licence. What you do need is to be properly registered for tax (HMRC/PAYE), have appropriate insurance, and meet health and safety obligations.
The licencing requirements that do exist are activity-specific and trade-specific – not company-level.
Trade-Specific Licences and Registrations
Gas Safe Register Mandatory for anyone working on gas fittings, appliances or pipework. Administered by Gas Safe Register. Workers must pass ACS (Accredited Certification Scheme) assessments. Working on gas without registration is a criminal offence with potential imprisonment.
Competent Person Schemes (Electrical) For notifiable electrical work in dwellings, registration with a competent person scheme (NICEIC, NAPIT, ELECSA or similar) allows self-certification without involving building control. Not mandatory – unregistered electricians can still do the work but must use building control notification – but in practice almost all domestic electricians are registered.
OFTEC Registration Required for oil-fired heating and cooking appliance installation and maintenance.
HETAS Registration Required for solid fuel heating systems.
Water Regulations Water fittings installations must comply with Water Regulations. Approved contractor status (with a water undertaker) is not mandatory but is strongly preferred and allows self-certification.
Activity-Specific Licences
Asbestos Removal Licence Required for any licensed asbestos removal work (the highest risk asbestos materials). Issued by the HSE. A separate, significant process involving inspection of your management systems. Non-licensed asbestos work still requires training and notification.
Explosives Licence Required for any use of explosives in demolition or construction. Issued by the HSE.
Environmental Permits If your work generates waste (demolition rubble, contaminated soil, hazardous materials), you may need environmental permits from the Environment Agency. Carrying and disposing of construction waste requires a waste carrier registration.
Street Works Licence If you work in the public highway (excavating roads, pavements etc.), you need a New Roads and Street Works Act licence. Most local authorities require this for any highway works.
Skip Licence / Skips on Public Highway Placing a skip on a public road requires a licence from the local authority. As the construction company, you’re typically responsible for ensuring this is in place.
CIS Registration (Not a Licence, But Required)
The Construction Industry Scheme (CIS) is not a licence but a tax registration. If you’re working as a subcontractor for a main contractor, you must register with HMRC’s CIS scheme. Unregistered subcontractors have 30% deducted from payments rather than 20%.
As a main contractor paying subcontractors, you must register as a CIS contractor and make monthly returns to HMRC.
What Commercial Clients Often Require
Commercial clients don’t issue licences – but they do require pre-qualification through schemes that verify your credentials:
- Constructionline – most widely required pre-qualification scheme
- SafeContractor or CHAS – health & safety accreditation
- ISO 9001 – quality management system
- CDM compliance – demonstration that you understand and fulfil your CDM 2015 duties
These aren’t licences in law, but in practice they function as gatekeeping requirements for commercial work.
Conclusion
Starting your own trades business is one of the most financially and personally rewarding things a skilled tradesperson can do. The foundations – the right structure, the right insurance, the right systems – take a few weeks to set up properly, but getting them right from the start saves significant time and money further down the line. For further guidance, visit Licensing for tradespeople: GOV.UK.
Frequently Asked Questions
Do I need a licence to build an extension?
No licence is required to build a domestic extension as a contractor. You do need to comply with Building Regulations (which are managed by building control, not a licence scheme) and planning permission where required. Your client obtains planning permission – not you as the contractor.Do I need a licence to start a demolition company?
No general demolition licence exists. However, demolition work is heavily regulated under CDM, requires specialist H&S planning, may require asbestos removal licensing, and for significant structures requires coordination with building control and potentially environmental permits.What is CIS and is it compulsory?
CIS (Construction Industry Scheme) is a tax administration scheme covering payments between contractors and subcontractors. If you pay subcontractors, you must register as a CIS contractor. If you work as a subcontractor, you should register to avoid the 30% deduction rate.Do I need a waste carrier licence for construction waste?
Yes. If you transport construction waste – including to a tip in your own van – you need to be a registered waste carrier. Register at the Environment Agency website. It costs £154 for a 3-year registration for a lower tier carrier (for your own business waste).Related reading:
