Licence and license are easy to mix up because they sound the same, but in British English they usually do different jobs.
Use licence as a noun. It means official permission, or the document that shows that permission. For example: She renewed her driving licence.
Use license as a verb. It means to give official permission. For example: The council will license the event.
- Noun: We need a fishing licence.
- Verb: The city does not license street sales here.
This noun and verb pattern is common in British English. In American English, license is often used for both the noun and the verb. That is why the difference can feel confusing if you read both varieties.
If you are writing for a British audience, remember this quick rule: licence is the thing, license is the action.