Many leases of business premises are covered by the Landlord and Tenant Act 1954, which helps protect your rights if you wish to renew your lease at the end of its term. Broadly speaking, if the lease is protected by the Act you will have a general legal right to renew the lease, unless you have breached its terms - but not if the landlord wants to sell or redevelop the premises, or move in. However, there can be financial implications: while rent reviews during the life of a lease may not have reflected the value of improvements you have made to the premises, the rent for a new lease can do so.
If, however, you do not wish to renew the lease, you may be responsible for restoring the premises to their original condition. In practice, this is usually a matter for negotiation - and, if necessary, agreeing an appropriate payment to cover any dilapidations - rather than carrying out works on the premises.
By contrast, licences (see question 1) are usually drawn up in such a way that they do not constitute leases for the purposes of the Landlord and Tenant Act. As part of the flexibility of a licence agreement, the landlord generally has the right to give you notice at any time, and you have no right to renew. As long as you have kept the premises in good condition without making alterations, you should have little or no liability for reinstatement.
