In the United Kingdom and the Crown Dependencies, any household watching or recording live broadcast television transmissions (terrestrial, satellite, cable, or internet) is required to purchase an annual television licence. As of 2010, this costs £145.50 for colour and £49.00 for black and white. Income from the licence is primarily used to fund the television, radio and online services of the BBC. Total levies from the licence fee were £3.662 billion in 2010 - 11 of which £579.4 million or 15.8% was provided by the Government through concessions for those over the age of 75.
The BBC is authorised by the Communications Act 2003 to collect the licence fees. The money received is first paid into the Government's Consolidated Fund. It is subsequently included in the 'vote' for the Department of Culture, Media and Sport in that year's Appropriation Act, and passed on to the BBC for the running of the BBC's own services (free from commercial advertisements), and for the BBC to produce programming for S4C.
The licence fee is classified as a tax, and evasion is a criminal offence. Since 1991, collection and enforcement of the licence fee is the responsibility of the BBC in its role as TV Licensing Authority. The BBC pursues its licence fee collection and enforcement under the trading name "TV Licensing", but subcontracts much of the task to commercial organisations.  A major subcontractor is Capita which specialises in outsourcing for government projects.
The licence fee can be paid annually, monthly or quarterly by Direct Debit, or monthly or weekly with a cash payment plan, which was introduced for those with limited means or no bank account, and replaced a previous scheme using trading stamps. The payment plan was designed not to discriminate against those who don't receive government benefits.
Payments made using Direct Debit carry an additional cost of £5.00 per year, or £1.25 a quarter, which is included in the licence fee total. This addition is described as "a small charge" in the generic letter issued by TV Licensing to those paying by Direct Debit, and on the TV Licensing website it is justified with: "Since the majority of the licence is paid for in arrears, your quarterly payments will include a premium of £1.25".
In the United Kingdom, Guernsey and Isle of Man, free TV licences are available for households with a member aged over 75. This is funded in the UK by the Department for Work and Pensions, and in the Crown Dependencies by their respective governments. The States of Jersey did not initially opt to extend this concession to their island; but free licences were later introduced for over 75s if they received an income under £13,000 for single people, or £21,000 for couples. In the Isle of Man, pensioners under 75 who receive income support can also get free licences. The funding is provided by the Isle of Man Department of Social Care.
Licences are half price for the legally blind. 
Those aged over 60 and in residential care homes (including nursing homes, public-sector sheltered housing and almshouses) can get Accommodation for Residential Care (ARC) licences for £7.50 a year.
See main article: Television licensing in the United Kingdom (historical). When first introduced on 1 June 1946, the licence covering the monochrome-only single-channel BBC television service cost £2 (£ as of). On 1 January 1968, a 'colour supplement' of £5 (£ as of), was added to the existing £5 monochrome licence fee; the combined colour licence fee was therefore £10, the equivalent of £120 in 2006. The current (2010) cost is £145.50 for colour TV and £49 for monochrome TV, per household.
A similar licence, mandated by the Wireless Telegraphy Act 1904, used to exist for radios powered by mains electricity (sets using a battery or accumulator did not need a licence), but this was abolished in 1971. These licences were originally issued by the General Post Office (GPO), which was then the regulator of public communications within the UK. For a more detailed historical explanation see British Broadcasting Company.
To date, the BBC World Service on radio and BBC Arabic Television have been funded by a grant from the government's Foreign and Commonwealth Office, not the licence fee, whilst S4C receives a fixed annual grant from the Department of Culture, Media and Sport; however, it was announced in October 2010, that these grants will be funded from licence fee by 2015.
BBC World News and the BBC's other international television channels are operated commercially and will continue to not receive licence fee money. The revenues they generate supplement the licence fee in financing the UK services.
(*) During 2006, the BBC stated that 5.2% of the licence fee was spent on collection and enforcement (exclusive of transmission costs).
Previous inquiries, such as the parliamentary Peacock committee in 1986 and the internal Davies committee in 2000, recommended continuing the licence fee, with conditions. In 2001, an Ofcom report found that the vast majority of those it interviewed, including owners of digital television equipment, supported the principle of a licence fee to fund public service television and radio. The advantages of such funding listed by those interviewed included diversity, high quality, education, innovation, entertainment, information, original productions, pluralism, accessibility, inclusion of minorities and free access. Another reason given in a response to Ofcom by the National Union of Journalists was that the licence fee allows the BBC to "retain independence" from both commercial and political pressures. Nonetheless, having surveyed public opinion during December 2003, a finding of the Department for Culture, Media and Sport was that "the way the licence fee is set and collected raised issues about fairness". Further criticisms, embodied in a 2005 Green Paper, included cost, value for money, whether or not the BBC should be publicly funded, the high cost of collection and enforcement and the methods used.
Meanwhile, in 2004, the Institute for Public Policy Research criticised the TV licence fee for its regressive impact, pointing out that it represents a much higher proportion of income for poor households, that evaders are most likely to be single parents, lone tenants, pensioners and the economically inactive and that the difficulties they have in paying the licence fee are compounded by the penalties enforced for non-payment.
In 2004, the BBC reported that "Almost 70% of people in the UK want changes to the way the BBC is funded", following an ICM poll for their current affairs programme Panorama, which showed that 31% were in favour of the existing licence fee system, 36% said the BBC should be paid for by a subscription and 31% wanted advertising to pay for the programmes.
In 2006, the House of Lords Select Committee on BBC Charter Review criticised the reclassification of the licence fee as a tax, pointing out that the BBC was in consequence reclassified as a central government body, with "significant implications for the BBC's independence".
In August 2008, the Guardian newspaper reported that "The BBC is facing an uphill battle to maintain support for the licence fee", stating that according to an Ipsos MORI poll the newspaper had commissioned, 41% agreed that the licence fee is an "appropriate funding mechanism" and 37% disagreed but when asked whether the licence fee is "good value for money", 47% disagreed, with more than half of them disagreeing strongly. The poll also showed that there is no longer a majority believing that the licence fee assured them of distinctive programming not available elsewhere ― which, the newspaper said, had long been one of the arguments for its existence: 41% of the population disagreed with only 30% agreeing. The poll also showed that opinion was split by a growing north-south and socio-economic divide.
In September 2008, the BBC's governing body, the BBC Trust, launched a review of TV Licensing's methods, following complaints about "heavy-handed" and "intimidating" tactics and during December 2008, it was reported by the press that the chairman of the all-party Commons Culture, Media and Sport committee had accused TV Licensing of behaving "like the Gestapo", employing "tactics that are outrageous", saying: "The tactics used by TV Licensing in their letters are intimidatory and cause genuine distress. Their records are not always correct, but they write letters that assume members of the public are criminals".
In September 2009, The Guardian reported an ICM poll showing an increase in support for the licence fee to 43%; "The fee is backed by 43%, against 24% who think advertising should foot the bill and 30% who think people should pay to subscribe if they want to see BBC programmes. In 2004, only 31% backed the licence fee, 12 points lower than today.".
The recent rise of multi-channel digital television has led to criticism that the licence fee is unjustifiable on the basis that minority interest programmes can now be transmitted on specialist commercial channels and that the licence fee is funding a number of digital-only channels which many licence holders cannot watch (for example BBC Three and BBC Four).
Other technologies for receiving visual media, such as mobile phones and computers connected to the Internet, has led to questions over whether or not a licence fee based on television receiver ownership can continue to be justified when a television receiver is no longer the sole medium over which the BBC distributes its content; and these technological changes led the Department for Culture, Media and Sport to state in 2005 that the collection of a fixed charge based on television ownership may become difficult to sustain.
Supporters of the licence fee claim that it helps maintain a higher quality of programmes on the BBC compared to its commercial rivals (although that would be a minority view according to a 2004 ICM poll), and allows the production of programmes that would otherwise not be commercially viable (although that would be a minority opinion according to a 2008 Ipsos MORI poll). Some claim that it also leads to better programmes on the commercial channels as they seek to draw viewers and listeners away from the BBC's output and Ofcom and the Department for Culture, Media and Sport have pointed out that if the BBC were to be funded by advertising then the increased opportunities for advertisers would result in reduced revenues for all media content suppliers.
Some critics claim that the licensing system interferes with the freedom to receive information and contend that this is a contravention of Article 10 of the European Convention on Human Rights (the right to freedom of expression). The ECHR in Application No. 26907/95 stated "Such an undertaking cannot be successfully accomplished unless it is grounded in the principle of pluralism, of which the State is the ultimate guarantor." and "The interference complained of was, therefore, necessary in a democratic society. There is, accordingly, no appearance of a violation of the applicant's right under Article 10 (Art. 10)."
The licensing system remains controversial in the Isle of Man due to the fact that the licence fee remains the same as in the UK and Channel Islands, even though the BBC provides neither a local television news service for the Isle of Man (similar to BBC Channel Islands) nor any BBC local radio or national radio opt-out station. The BBC has sought to redress the lack of coverage by improving its online news service for the Isle of Man, with permanent BBC staff based at the Manx Radio studios in Douglas. A Select Committee of Tynwald was established in 2009 to investigate the value for money of the licensing system for the Isle of Man, and the feasibility of the Isle of Man withdrawing from it.
According to Act of Parliament, a TV licence must be obtained for any device that is "installed or used" for "receiving a television programme at the same time (or virtually the same time) as it is received by members of the public".
According to TV Licensing, "You need a TV Licence to use any television receiving equipment such as a TV set, digital box, DVD or video recorder, PC, laptop or mobile phone to watch or record television programmes as they're being shown on TV". Portable televisions and similar equipment such as laptops and mobile phones powered by internal batteries are covered for use anywhere under a licence held for their owner's residence.
The BBC have stated that a licence is not needed simply because a television receiver is owned.
A previously recorded TV programme is outside the scope of the Communications (Television Licensing) Regulations 2004, because it is not "received at the same time (or virtually the same time) as it is received by members of the public" (viewing such recordings however, if unauthorised, may infringe copyright).
According to Ofcom, TV transmissions over the Internet are a grey area which in future might make fees based on television ownership redundant. In 2005, a Green Paper by the Department for Culture, Media and Sport included suggestions of "either a compulsory levy on all households or even on ownership of PCs as well as TVs". However, TV Licensing have since stated that use of any device (including a computer or mobile phone) receiving transmissions at or about the same time as they appear on TV requires a licence. 
It used to be the case that televisions receiving a transmission from outside the UK (e.g. in Germany, Italy, Greece, Turkey and the Netherlands via the Astra satellite, on which many channels are free-to-air) did not need a licence, but this was changed by the Communications Act 2003, so that the reception of television from any source requires a TV licence.
A licence is required to watch live TV transmissions anywhere, including residential and business premises.
For residential premises, only one licence is required per household per address, regardless of the number of licensed devices or the number of members of the household.
A rented property in multiple occupation by a joint tenancy agreement is considered by TV Licensing as one household and requires only one licence, but a rented property with multiple, separate tenancy agreements is not considered a single household and each tenant may require a separate licence. For example, a house in multiple occupation may have private bedrooms and shared communal areas: if five occupants share such a property with individual tenancy agreements then they may require up to five television licences if each private room contains a television receiver, while a similar property housing five occupants under a joint tenancy agreement may require only one television licence.
Use of television in a static caravan is covered by the licence held for the user's main address, provided there is no simultaneous use of television at both places, and the use of television in a touring caravan is always covered by the user's main home licence. The use of a television set which is powered solely by its own internal batteries is covered for any address by the user's main home licence, but requires a separate licence if it is plugged into the mains or other external power source, such as a car battery; this also applies to TV-enabled mobile telephones.
TV detector vans have in the past featured heavily in TV Licensing publicity, implying that secret technology capable of detecting signals from operating TV sets is employed, and TV Licensing has claimed to have developed a hand-held detector. The BBC states that such technology used in conjunction with targeted advertising acts as a deterrent: its use may make it easier for TV Licensing agents to establish that an offence is likely to be taking place but they would still need to secure further evidence for successful prosecution. Furthermore, such technology is restricted in its use by the meaning of "surveillance and covert human intelligence sources" in the Regulation of Investigatory Powers Act 2000 and the Regulation of Investigatory Powers (British Broadcasting Corporation) Order 2001.  TV Licensing now states "We will only use detection equipment to identify evaders when other, more cost effective, routes have been exhausted", and the BBC has stated that "Detection technology is generally used to obtain search warrants". No data from technology claimed to detect television signals has ever been used as court evidence, and the existence of such devices is thought by some to be unlikely.
The critical method of detecting evaders is through the use of a database system known as LASSY, which contains 29.5 million addresses in the UK. This database is routinely updated with licence details and with details submitted by dealers in television receiving equipment, all of whom are required by law to provide TV Licensing with identifying information about everyone who buys or rents such equipment. TV Licensing maintains permanent contact with every address in the database that is recorded as not having a TV licence.
The initial contact with occupants of addresses for which there is no current licence is by letter. During the year 2005–6, approximately 23.5 million "standard warning" letters were sent. The methods by which an occupant can reply are in writing, by telephone or by filling in an online form [https://tvlicensing.metafaq.com/templates/tvlicensing/emailforms/noSet]. If a business or household is not obliged to have a TV licence then TV Licensing will request written confirmation of this, even though no such information is required to be given in law. 
If a colour TV licence is not purchased for an address, TV Licensing agents—known as "enquiry officers" or "enforcement officers"—make unannounced visits to the address. Visits are made even when the occupant has declared that no licence is necessary, or when a licence has been purchased for only black-and-white television. The number of visits rose from 2.9 million during the year 2005–6 to 3.5 million during the year 2006–7. The BBC Trust states that during the year 2007–2008, when people who had said that they did not require a TV licence were visited, 27% were found to need one.
TV Licensing enforces the BBC's statutory obligation to ensure that every address where a television licence is required is correctly licensed, but its agents have no special rights and, like any other member of the public, rely on an implied right of access to reach the front door. The occupants may deny an agent entry to the premises without cause and are under no obligation to answer any questions or enter into any conversation. If an agent has evidence that television is being watched or recorded illegally but is denied entry by the occupants so that (s)he cannot verify the suspicion without trespassing, then TV Licensing may apply to a magistrate for a search warrant, but the use of such warrants is rare. The BBC states that a search warrant would never be applied for solely on the basis of non-cooperation with TV Licensing  and that in the event of being denied access to unlicensed property will use detection equipment rather than a search warrant.
The law allows a fine of up to £1,000 be imposed on those successfully prosecuted. This figure is frequently publicised by TV Licensing to maximise deterrence. In reality, magistrates rarely impose the maximum fines allowed to them by law. During the year 2005–6, the average fine including costs was approximately £153 (slightly more than the cost of a licence).
TV Licensing is managed as a sales operation and its officers are motivated by commission payments . In 2005, a TV Licensing officer was found guilty of false accounting and perverting the course of justice after he deliberately forged the confessions of four people to obtain commission payments. There have been numerous cases of TV Licensing officers engaging in threatening and bullying behaviour.
For the year 2005–6, TV Licensing claimed that they "reduced estimated evasion to a record low of 4.7%". However, this figure rose during the following year to 5.1% and remained at 5.1% during 2007–8.
The Broadcasters' Audience Research Board estimated that of June 2004, 2.3% of UK households do not have television, and in September 2008, the BBC reported that some one million people do not need a TV licence. Alleged excuses given by householders for not having a licence include loss of mail, being "too busy" and suffering from polymorphous light eruption (sun allergy).
The Communications (Television Licensing) Regulations 2004 gives the following definition: