Thanks for the responses. That has cleared up some questions I had on VLANs but I still need to do some more googleing!
So as I'm in the UK I don't need to keep any log of such data?
If you are in the UK, then an ISP must (more precisely, not all is mandatory, but it is extremely strongly recommended) keep this data. The question is whether you are an ISP, and if so, whether you can be exempted for reasons of size, etc. Expert advice is necessary as the law is not absolutely clear.
In practice, if you experience abuse by users, either through excessive bandwidth consumption, copyright infringement, harassment, etc. you will need to have facilities available to log data for investigation of breach of terms&conditions, etc.
Re what if each person plugged in a wireless access point...Each device would still need to login to the system via a captive portal or similar, so even if they did put a wifi AP, they would still need to log in
It depends how you set things up. If someone plugs in an AP, then it can work either as a dumb AP, in which case anything that connects has direct access to your network (devices will try to acquire IP addresses from your DHCP infrastructure, etc.). In this case, each device will need to authorize individually;
Alternatively, and this is the default mode of operation for cheap Wifi equipment is that it can act as a NAT router.
In the later scenario, a NAT router will only need to be logged into a captive portal once, and all devices behind it will be connected via that authorization. If you already provide NAT to your users (as you almost certainly will have to do so, as you probably won't be able to get sufficient IP space), then this double-NATting will break pretty much everything that isn't web. Skype, VOIP, Push notifications on mobile devices, gaming, VPNs, etc. will all be pretty much non-functional via a double-NAT system.