Trade plates are used by motor traders, garage owners and vehicle repairers to legally move vehicles without individual road tax. Understanding the trade licence system helps businesses reduce unnecessary road tax costs.
What Are Trade Plates?
Trade plates — also called trade licences or trade number plates — are number plates issued to motor traders that can be displayed on any vehicle being tested, transported or demonstrated by the trade. They allow a trader to move multiple vehicles without each vehicle needing its own road tax. Trade plates are registered to the business, not individual vehicles. Apply for trade plates via GOV.UK.
How Trade Plates Work
When displaying trade plates, the vehicle does not need its own road tax — the trade licence covers it. Trade plates must be clearly displayed on the front and rear of the vehicle. They are valid for 12 months and can be renewed annually. The trade licence holder is responsible for ensuring vehicles being moved on trade plates are roadworthy and insured. The trade plate user must also be covered under the trade's motor trade insurance policy.
Trade Licence VED
Trade licences themselves are subject to a reduced VED rate. The trade licence annual fee covers the right to use trade plates and includes a VED element. The cost varies depending on the type of trade — the fee for a motor dealer or repairer is higher than for a single-operator trade. This fee is significantly cheaper than paying individual road tax on every vehicle in the business — particularly for dealers with large inventories of vehicles awaiting sale.
Restrictions on Trade Plate Use
Trade plates cannot be used for personal journeys or commuting. They can only be used for purposes directly related to the motor trade: moving vehicles for repair, testing, demonstrating to customers, or transporting between premises. Using trade plates for personal benefit is illegal and can result in fines, vehicle seizure and loss of the trade licence. HMRC and DVLA can investigate misuse of trade plates.
Who Can Apply for Trade Plates?
Trade plates are available to businesses and sole traders engaged in the motor trade, including car dealers, mechanics, valeters, recovery operators, auction houses and vehicle inspection services. You need to demonstrate your business activity to DVLA when applying. Individual mechanics working for an employer can use their employer's trade plates — they cannot apply for personal trade plates unless they are self-employed in the motor trade.