Trade Licenses for Trade Plates – “red on white stop on sight”

Posted by Jonny on Oct 29, 2016 in Latest News |
John Dyne, Transport Lawyer. Secretary to HTA and BSA

John Dyne, Transport Lawyer. Secretary to HTA and BSA

I can’t now recall who is attributed to the saying “red on white stop on sight” but I think it was a Judge sitting on a trade plate case many, many years ago. I rather think the saying has more to do with picking up delivery drivers holding up trade plates on the roadside than a team leader’s mantra delivered fora pre-roadside enforcement pep talk.

I have had some enquiries about trade plates so I thought I would do a short piece on the law concerning trade licenses for trade plates.Trade licence plates can save you time and money if you’re in the motor industry – you won’t have to register and tax every vehicle temporarily in your possession. You need to apply to DVLA for a trade licence to be able to use trade plates.

If you possess a trade licence for a trade plate then that is an important and valuable asset. There is no automatic right to the issue of a trade licence and there are reserved only for those meeting very strict criteria.

To be eligible for a trade licence you must either be a motor trader or a vehicle tester. A motor trader is entitled to use the trade licence on mechanically propelled vehicles only if they are temporarily in their possession in the course of their business. A motor trader who is a manufacturer may also use the licence on a vehicle kept only for research and development purposes, or on vehicles that are submitted to them for testing by other manufacturers. A vehicle tester may use the trade licence only on vehicles submitted to them for testing (including the vehicle’s trailer, its accessories or equipment).

A Motor Trader is defined as:

• a manufacturer or repairer of, or dealer in, mechanically propelled vehicles, or
• a dealer in vehicles, if they carry on a business consisting wholly or mainly of collecting or delivering mechanically propelled vehicles and not including any other activities except those of a manufacturer or repairer of or dealer in such vehicles.

Vehicle Testers are defined as:

• a person other than a motor trader who regularly in the course of their business engages in the testing on roads of mechanically propelled vehicles belonging to
other people.

The majority of operators of HGVs, PCVs, Plant and Mobile Cranes should in theory be entitled to apply for and receive Trade Licences under the ‘repairer of ‘ pre-qualification as most if not all will have a workshop and will carry out repairs but they will be constrained by the ‘temporarily in their possession’ qualification. Most of the vehicles worked on in the workshop may well be in the regular fleet. It might  pay to have the haulage side of the business separate from the repair and maintenance side so the repairers are only in temporary possession of the vehicle when it comes to them for repair.  The regulations specifically cater for the movement of semi-trailers (which are obviously not mechanically propelled vehicles) where the vehicle and the semi-trailer are taken to constitute a single vehicle. However it does not appear that any  provision is made for a draw bar trailer configuration where a substantial part of the weight of the trailer will not be borne by the mechanically propelled vehicle.

The pre-qualification that the business must consist wholly or mainly of collecting or delivering mechanically propelled vehicles applies to a dealer in vehicles with the exception that they can also be a manufacturer or a repairer. According to Government Guidance ‘dealer in vehicles’ includes hire and leasing companies and also finance/HP companies which presumably comes as an extra statutory concession because such businesses clearly do not consist of wholly or mainly collecting or delivering vehicles for manufacture or repair..

There are a limited set of purposes for which a motor trader may use a vehicle on a public road by virtue of a trade licence which are

(a) business purposes (i.e. used for purposes connected with the motor trader’s business);
(b) paragraph 12 purposes; and
(c) purposes that do not include the conveyance of goods or burden of any description except specified loads (e.g. for testing purposes /vehicle for the return journey).
Paragraph 12 purposes include any of the following purposes—

(a) for its test or trial or the test or trial of its accessories or equipment, in either case in the ordinary course of construction, modification or repair or after completion;
(b) for proceeding to or from a public weighbridge for ascertaining its weight or to or from any place for its registration or inspection by a person acting on behalf of the Secretary of State;
(c) for its test or trial for the benefit of a prospective purchaser, for proceeding at the instance of a prospective purchaser to any place for the purpose of such test or trial, or for returning after such test or trial;
(d) for its test or trial for the benefit of a person interested in promoting publicity in regard to it, for proceeding at the instance of such a person to any place for the purpose of such test or trial, or for returning after such test or trial;
(e) for delivering it to the place where the purchaser intends to keep it;
(f) for demonstrating its operation or the operation of its accessories or equipment when it is being handed over to the purchaser;
(g) for delivering it from one part of the licence holder’s premises to another part of his premises, or for delivering it from his premises to premises of, or between parts of premises of, another manufacturer or repairer of or dealer in vehicles or removing it from the premises of another manufacturer or repairer of or dealer in vehicles direct to his own premises;
(h) for proceeding to or returning from a workshop in which a body or a special type of equipment or accessory is to be or has been fitted to it or in which it is to be or has been painted, valeted or repaired;
(i) for proceeding from the premises of a manufacturer or repairer of or dealer in vehicles to a place from which it is to be transported by train, ship or aircraft or for proceeding to the premises of such a manufacturer, repairer or dealer from a place to which it has been so transported;
(j) for proceeding to or returning from any garage, auction room or other place at which vehicles are usually stored or usually or periodically offered for sale and at which it is to be or has been stored or is to be or has been offered for sale as the case may be;
(k) for proceeding to or returning from a place where it is to be or has been inspected or tested; or
(l) for proceeding to a place where it is to be broken up or otherwise dismantled.

Business purposes are defined in a limited manner which could potentially catch a Motor Trader out if they have business activities that are wider than simply being a manufacturer or repairer of, or dealer in mechanically propelled vehicles and they use a vehicle on trade plates for those wider activities.

A vehicle is used for “business purposes” if it is used for purposes connected with the motor trader’s business—
(a) as a manufacturer or repairer of or dealer in vehicles,
(b) as a manufacturer or repairer of or dealer in trailers carried on in conjunction with his business as a motor trader,
(c) of modifying vehicles (whether by the fitting of accessories or otherwise); or
(d) of valeting vehicles.

The use of trade plates cannot extend to wider uses not covered by the business purposes criteria.

If you are affected by any of the issues raised in this publication please do not hesitate to contact us.

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