The statutory test
Limited permission is a Part 4A permission for a relevant credit activity as defined in paragraph 2G of Schedule 6 to the Financial Services and Markets Act 2000. The definition is a closed list. Credit broking is a relevant credit activity when it is carried on by a supplier for the purposes of, or in connection with, the sale of the supplier's own goods or services, when it relates to a green deal plan, or when it relates to a consumer hire or hire-purchase agreement. Lending is a relevant credit activity only where the lender is a supplier, no charge of any kind is payable by the borrower in connection with the credit, and the agreement is neither a hire-purchase nor a conditional sale agreement, or where the lender is a local authority. Entering into regulated consumer hire agreements is a relevant credit activity in its own right. Debt adjusting and debt counselling are relevant credit activities when carried on by a supplier alongside its credit broking, in connection with its own lending or hire, or by a not-for-profit body, and providing credit information services qualifies when it is carried on in connection with any of these activities.
A supplier, for these purposes, is a person whose main business is to sell goods or supply services and not to carry on a regulated activity, other than consumer hire. A domestic premises supplier, which sells or offers goods or services to individuals while present at their home, cannot rely on the supplier case for credit broking, debt adjusting or debt counselling. Except for not-for-profit bodies, none of these activities is a relevant credit activity where the agreement is secured by a legal mortgage on land. Any consumer credit activity outside the list requires full permission, and a firm that already holds a Part 4A permission for other regulated activities, such as insurance or mortgage broking, holds full permission for its consumer credit activities whatever they are.
Where firms misjudge the boundary
The FCA has published the misunderstandings it sees most often. The most common concerns charges. A supplier that offers credit on which no interest is payable is within limited permission only if no charge of any kind is payable in connection with the credit; the FCA's view is that a default charge for a missed payment is such a charge, so an otherwise interest-free arrangement with a late payment fee requires full permission. Hire-purchase and conditional sale lending are excluded from limited permission whatever the charges.
Credit broking is the second. A retailer that arranges finance from a third-party lender for its customers is credit broking, and limited permission is available only where the broking relates to the firm's own goods or services and its main business is not a regulated activity. A firm whose main business is introducing customers to lenders, or one that arranges credit unconnected with goods or services it supplies, needs full permission. The domestic premises exclusion is also frequently missed: the FCA has said that making an offer during a home visit can make a firm a domestic premises supplier even if the contract is concluded later online or at the firm's premises.
Debt activities are the third. Collecting debts and administering agreements on behalf of another person are full permission activities, and the FCA has noted that a firm to which collection or administration is outsourced will usually need its own permission unless it is an appointed representative of a firm that holds full permission. Helping customers with their debts can amount to debt counselling or debt adjusting even where the firm does not run debt management plans. A firm that purchases debts and collects them for itself takes on the lender's rights and requires full permission for lending.
What full permission involves
The difference goes beyond the activities a firm may carry on. Limited permission firms are subject to fewer of the threshold conditions, the minimum standards a firm must meet to be authorised and to remain so. Under the Senior Managers and Certification Regime, a firm whose permission is limited to relevant credit activities is a limited scope firm, while a full permission firm is usually a core firm, with the wider senior management functions, prescribed responsibilities and certification obligations that follow. The FCA's application fee is set by pricing category, and the categories for full permission are higher than the category for limited permission. Even the change in control regime differs: for a firm with only limited permission, a proposed controller is not required to notify the FCA until its holding reaches 33 per cent.
A full permission application is correspondingly more demanding. The FCA expects a regulatory business plan, financial forecasts, policies and procedures written for the firm's own activities, and applications for each individual who will hold a senior management function. Each permission sought must be justified by the business plan and supported by the firm's systems and controls. A lender must show how it assesses creditworthiness and affordability, how it is funded, and how it treats customers in arrears or financial difficulty; a debt collector must show how it treats customers in default and how it handles the data and funds it receives. Under section 55V of the Act, the FCA must determine an application within six months of receiving it complete, or twelve months if it is incomplete.
Choosing the permission
The permission applied for should match the firm's activities as they are and as they are planned to be. A firm that applies for limited permission when its business requires full permission will either be refused or be authorised for activities that do not cover what it does, and carrying on a regulated activity outside the scope of a firm's permission is itself a breach of the Act. A firm that expects to add charges, extend credit beyond its own goods or services, or collect debts for others within the period of its business plan should apply for full permission from the outset. An authorised firm that needs to move from limited to full permission, or to add consumer credit activities to an existing permission, usually applies to vary its existing permission.
How we can help
We prepare full permission applications for lenders, credit brokers, debt collectors and administrators and debt counsellors and adjusters, and variations of permission for authorised firms adding consumer credit activities. Where a firm's activities fall within limited permission, we advise accordingly. See full FCA permission for consumer credit, which also sets out the FCA's application fees, or speak to us.
Sources
- Financial Services and Markets Act 2000, Schedule 6, paragraph 2G (relevant credit activities) and section 55V
- FCA Handbook, Glossary: limited permission; SYSC 23 Annex 1 (types of SMCR firm); SUP 11.3 (controllers)
- Financial Conduct Authority, Apply to become a consumer credit lender or hirer
- Financial Conduct Authority, Consumer credit permissions: common misunderstandings
Checked 17 October 2026.