Leeds council calls on Government to close “licence transfer loophole”

Leeds City Council has issued a national call for urgent reform of the Licensing Act 2003, warning that a long‑standing loophole is enabling organised criminal groups to evade enforcement and continue trading illicit tobacco, alcohol and vapes.

In a letter sent to the Minister for Crime, Policing and Fire, Dame Diana Johnson MP, the council—supported by more than 240 organisations across England and Wales—urges the Government to close what enforcement bodies describe as the “licence transfer loophole”. The mechanism allows premises licence holders to transfer their licence during a review or appeal, effectively resetting enforcement action and allowing criminal activity to continue.

National evidence of widespread exploitation

The call follows a national survey coordinated by Leeds City Council in late 2025, which gathered responses from licensing authorities, Trading Standards teams, police forces and public health professionals.

Key findings include:

• 69.6% of respondents have experienced problems with licence transfers during enforcement action.
• 83.3% review alcohol licences due to criminality such as illicit tobacco or illegal alcohol sales.
• 98.3% support national legislative reform.
• 140 qualitative responses detailed enforcement barriers, loopholes and case studies.

The survey revealed a consistent pattern: when enforcement agencies initiate a licence review—often following the discovery of illicit tobacco, illegal vapes, underage sales or wider criminality—operators frequently transfer the licence to an associate or shell company. This tactic, known by officers as the “transfer loop”, can delay hearings, frustrate investigations and allow the same individuals to continue operating behind the scenes.

Case studies highlight systemic failures

The report includes multiple real‑world examples:

• Repeated transfers during a review allowed a premises selling illicit tobacco to continue trading until the appeal was withdrawn, forcing officers to restart the process.
• Company directors resigning and re‑appearing created legal uncertainty and delayed prosecutions, with one case requiring junior counsel due to the complexity of backdated Companies House filings.
• Appeals delaying enforcement for months, during which further criminality occurred, undermining public confidence and exhausting local authority resources.

Officers described the current system as “a mockery of enforcement”, with some appeals taking 6–18 months to reach court.

Cllr James Gibson, Chair of the Licensing Committee, has written to the Minister calling for immediate legislative change. The letter is co‑signed by West Yorkshire Directors of Public Health and supported by authorities nationwide.

The council argues that without reform, the same loopholes will undermine the forthcoming Tobacco and Vapes Bill, which proposes a national tobacco licensing scheme.

“Should the Licensing Act 2003 remain unchanged, it will provide an unstable foundation for the proposed tobacco licensing regime,” the letter warns, adding that organised criminal groups will continue to exploit procedural weaknesses unless the law is strengthened.

Proposed reforms

The briefing sets out a series of recommendations widely supported by enforcement professionals:

1. Strengthen licence transfer controls

• Prohibit transfers during reviews or appeals.
• Introduce a cooling‑off period after revocation.
• Require full disclosure of beneficial ownership.

2. Expand enforcement powers

• Allow Trading Standards and Licensing Authorities to object to transfers.
• Extend closure powers to non‑licensed premises selling illicit goods.

3. Improve accountability

• Introduce a “fit and proper person” test.
• Mandate DBS checks and create a national register of personal licence holders.

4. Reform appeals

• Suspend trading rights during appeals.
• Introduce fast‑track appeal mechanisms for serious offences.

5. Enhance penalties

• Increase fines and custodial options for repeat offenders.
• Enable asset recovery and financial investigations.

6. Strengthen national coordination

• Establish a central intelligence‑sharing platform.
• Fund a national taskforce to support local enforcement.