The cost of a licence to place tables and chairs on a pavement in the Royal Borough of Kensington and Chelsea changed in April after the Council opted to move away from a flat fee.
The new arrangements mean the cost of a licence will now depend on how many tables and chairs the business owner wants to place on the pavement and whether the tables and chairs will be placed out in the evening.
This will be good news for smaller businesses which only want a few tables and chairs outside.
The ability for the Council to move away from a flat rate fee was obtained after it persuaded Parliament to amend the regulations governing highways licences.
Previously it cost £875 for a licence. Now the licence will cost £485 with an additional charge of £18 per chair.
Councillor Tim Coleridge, Cabinet Member for Planning Policy and Transport, said: “Many people enjoy the al fresco drinking and dining on offer in the borough. The licence plays an important part in allowing us to make this possible while at the same time ensuring our pavements do not become an obstacle course.
“This move away from one flat fee will be good news for those businesses that perhaps only have room to place one or two tables outside.”