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Commercial vehicle insurance and regulations explained

From road tax and van licences to insurance and MOT, here are the legal issues you need to be aware of for your business van

There are a number of legalities that need to be put in place if you want to obtain a van for your business.

From road tax, to insurance, these costs can add up, so be sure to do your sums correctly to avoid any unnecessary charges.

Road Tax

While the size of your van may not be much bigger than a large car, the means by which road tax is calculated differs greatly.

Cars have their road tax determined by their petrol type and their CO2 emissions.

At present, road tax for vans and light goods vehicles (LGVs) is based on two factors: when the vehicle was first registered and its Euro standard.

The current road tax bands for LGVs weighing no more than 3,500 kgs are:

  • LGVs (tax class 39), registered on or after 1 March 2001 – £240 for 12 months road tax or £132 for six months
  • LGVs (tax class 36), registered between 1 March 2003 and 31 December 2006 and which are Euro 4 compliant – £140 for 12 months road tax or £77 for six months
  • LGVs (tax class 36), registered between 1 January 2009 and 31 December 2010 and which are Euro 5 Compliant – £140 for 12 months road tax or £77 for six months

Be sure to keep checking the government website on the rates of vehicle tax. In general however, the greener the vehicle, the cheaper the tax will be.


Driving a van for personal use only requires a minimum of third party insurance.

However, if you intend to use your van for commercial use, by law you must have Hire and Reward insurance.

This type can in fact be third party only, but it is normally just as expensive as it is higher risk insurance. As with other types of insurance, such as home and travel, there are many different providers of vehicle insurance, all offering competitive deals and prices.

There are also a number of comparison websites where you can measure different packages against each other.

Every business is different, in terms of the service they provide and the legalities involved, so an insurance package that suits one company, may not work for another. Once again, make sure you research thoroughly the various options before deciding on what's best for your business.


Vans are the same as cars when it comes to Ministry of Transport (MOT) tests. Van drivers are advised to service their vehicle every 10,000 miles and it makes no difference if the van is driven for personal or commercial use.


If a van is used for commercial use smoking is not permitted anywhere in the vehicle.

Since the smoking ban came into force in July 2007, it has been illegal to smoke in offices or any workplace, including work vehicles. This law is taken very seriously and those who smoke in their company vehicle will be fined on the spot if caught.


Anyone with a regular driving licence can legally drive a van of up to 3.5 tonnes.

Luton vans weigh 3.5 tonnes, and anything above that is classified as a small lorry or heavy goods vehicle (HGV), which requires a separate HGV license. It costs around £200 to take an HGV test, and like car tests, it requires a substantial amount of lessons before hand.


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