Janneta Hooley, owner of T and J Hooley, on Rossall Road, Cleveleys, says the Performing Rights Society is demanding £100 for a licence to play a radio in her workroom – even though she only has one worker in at any time.

She said: "It's outrageous. They are targeting small businesses to get licence fees.

"Small businesses in general, especially at times of reduced consumer spending, watch what they spend their money on very carefully and while £100 a year might not sound like much, it makes a difference."

Miss Hooley says she had checked whether she should buy a licence for her bespoke tailoring and millinery business, which has been in the family for 40 years, around two months ago – but found she was exempt.

She added: "I had checked on the website and I was not liable for this licence, due to having less than five staff and having the radio on in the workroom only.

"But, apparently, they have changed the rule to include everyone and anyone who has more than one person at a time listening to any form of music or entertainment if it is outside your home.

"Does this also include the car radio if you are being eco-friendly and drive other people to work?"

Miss Hooley is not only concerned for small businesses having to cope with the fees, she fears it will affect local radio stations and artists.

She added: "The majority of small businesses will be switching off their radios rather than buying licences. Rather than raising additional funding through the application of licences, the PRS are actually causing a threat to local radio station support.

"If people are not listening to the radio, they will not hear songs by the very performing artists the PRS is helping. Isn't this contradictory to what they are trying to achieve?"

But a PRS spokeswoman said permission was needed to play copyright music in public to customers or employees.

She added: "A PRS licence allows you to play 10 million pieces of music, 24 hours a day, seven days a week.

"Without PRS, businesses would have to negotiate separately with millions of music owners around the world .

"PRS plays a vital role in ensuring creators receive royalties for the use of their work."

PRS has been licensing music use in businesses since 1914 and operates by 1988 Copyright Designs and Patents Act.