Classic car restorer legal issues

Row of multiple classic cars lined up

If you are starting a new business, rather than taking over an existing one, you may need to obtain planning permission from the local planning authority. Even if you are taking over an existing garage, additional planning permission may be required for paint spraying work if you decide to offer this.

There is a range of legislation that may apply to your business, particularly in areas such as health and safety, environmental protection and fair trading. The following is an outline of some of the key pieces of legislation that are likely to apply to a classic car restorer. The list is not intended to be exhaustive.

What licences does a classic car restorer need?

Under pollution control legislation, businesses that engage in vehicle refinishing activities are normally required to hold an environmental permit (in England and Wales) or a pollution prevention and control permit (in Scotland and Northern Ireland). Permits are issued by the Environment Agency in England, Natural Resources Wales, the Northern Ireland Environment Agency and the Scottish Environment Protection Agency (SEPA). Permit conditions require equipment and procedures to meet specific requirements and conditions. Business premises that have a permit are regularly inspected.

A similar permit system applies to businesses that use waste oil burners. You can find out more about environmental and pollution control permits on the website.

Be aware that premises in Wales which produce 500kg or more of hazardous waste in any 12 month period need to register with Natural Resources Wales.

If you wish to carry out MOT testing, you and your premises will require appropriate authorisation from the Driver and Vehicle Standards Agency (DVSA). An application form from the DVSA must be returned with references and plans of the premises and surroundings. Officers from the DVSA will visit the site to check that the test equipment is functional and correctly calibrated. Further information is available on the website. (All MOT testing in Northern Ireland is carried out by the Driver and Vehicle Agency at their own special test centres.) Be aware that from 20 May 2018 most vehicles over 40 years old (on a rolling basis) are exempt from MOT testing, but they must be in safe roadworthy condition if they are used on public roads. Cars that have been substantially changed must continue to be tested annually.

Note that all vehicle number plate suppliers in England and Wales are required by law to register with the DVLA. You can find out more about registering on the website. While considering that, remember that there are authorised ways to obtain personalised number plates. You can carry out research to check if the registration you want is available.

If you want to drive unregistered vehicles - possibly imported classics - which are temporarily in your possession, and/or untaxed vehicles, then you will need trade licence plates ('trade plates'). You will have to apply for these to the DVLA, who will expect you to show that you are a bona fide motor trader. You are only permitted to drive on trade plates for certain purposes - for example test drives, deliveries, and taking a vehicle to another motor trader's premises. Note that trade plates only exempt you from the need to tax a vehicle - they don't exempt it from MOT testing requirements (where applicable) or the need to be properly insured. However, by registering your trade plates with the Motor Insurance Database then the relevant authorities will be able to see that you have an appropriate motor trader's insurance policy in place to cover you. Trade licence plates are valid for a period of between six and 12 months, after which you'll need to renew them if you still need them. A fee is due for applications and renewals. You can find out more and apply for trade licence plates on the website.

Local authorities in Scotland require second-hand dealers - including motor dealers - to obtain a licence or registration to operate. This applies unless dealing in second-hand goods is only incidental to the main business activity. Elsewhere in the UK, some local authorities license or register businesses where second-hand dealing is the main or a significant part of the business and is not just incidental. However, motor vehicle dealers are normally exempt (as are businesses which hold consumer credit authorisation). If you are in any doubt as to whether second-hand dealer licensing may apply to your business, contact your local authority trading standards department for guidance.

The Financial Conduct Authority (FCA) regulates the sales of general insurance products. All businesses that sell and administer general insurance products must be authorised to do so by the FCA - either directly or as an 'appointed representative' of an authorised principal. This applies even if no extra charge is made for the insurance. Examples of the types of insurance product covered by this requirement include:

  • extended motor warranties
  • MOT protection insurance
  • tyre insurance
  • some rescue and recovery policies
  • key fob insurance
  • motor insurance

Repair and restoration work - fair trading and consumer protection

Consumer protection and road safety legislation covers the sale and supply of goods and services - including the supply of car parts and repairs. You are responsible for ensuring that the correct parts are used and fitted safely and that all restoration or repair work is carried out in a way that will ensure the vehicle is safe and roadworthy. Pricing must be fair and transparent, and you must deal fairly and honestly with customers at all times.

You can find out more about fair trading and consumer protection legislation on the Trading Standards Business Companion website. Information for businesses is also available on the website. Local authority Trading Standards departments will be able to answer specific queries.

A range of information sheets providing general guidance and advice on legislation covering vehicle safety standards is available on the website.

Registering, taxing and insuring vehicles

You're likely to have quite a large number of vehicles passing through your business on a regular basis - customers' vehicles in for repairs and restoration, courtesy cars, project cars and any used vehicles that you acquire as stock to sell on. You'll need to take certain steps to make sure that they stay legal while they're in your care, whether you drive them on the road or not.

You'll need a motor trade insurance policy to cover you when you're driving different vehicles. See below.

Vehicles which you own temporarily but which aren't registered to you or your business - for example used stock vehicles that you have for sale - don't normally have to be taxed. You can drive them on the road for certain permitted purposes such as test drives and deliveries if you use trade licence plates. However, if a vehicle remains in your possession for more than 90 days then you must normally register it yourself and then either declare it off the road or tax it. There's more information about trade plates on the website.

Hazardous substances

Many hazardous substances are used in a restoration workshop and specific regulations (known as Control of Substances Hazardous to Health regulations or COSHH) cover their use, storage and disposal. Ensure that your and any employees' exposure to potentially harmful substances is minimised. This might involve precautions such as using dust masks and goggles if sanding body filler, and using gloves or barrier cream to limit exposure of the skin to oil, grease and solvents. If any paint spraying is done, protective clothing and in particular, appropriate breathing apparatus (such as air fed masks) must be used. Ventilation equipment will also be needed. Hazardous substances must be stored correctly, too.

The HSE and HSENI websites include information about keeping yourself and your employees safe from potentially hazardous substances.

REACH regulation

Because you'll be using chemicals in your business activities you may be affected by regulations referred to as REACH - this stands for the Registration, Evaluation, Authorisation and Restriction of Chemicals. You have a duty to use chemicals in a safe way and to follow the information on risk management measures. You can find out more about how REACH may affect you on the HSE website.

Waste disposal and the environment

All waste must be disposed of properly. In particular, hazardous waste such as old oil, lead acid batteries, brake fluid, paint and other chemicals must only be taken away and disposed of by registered, authorised waste carriers.

Legislation also covers the emission of fumes and dust from paint spraying and bodywork repairs, which may be of relevance if you carry out this kind of work. Contact your local environmental health department for guidance. More information about pollution control and environmental protection matters is available from the website.

Health & safety, fire

You must also make sure that you comply with workplace health and safety and fire safety legislation.

Employment legislation

Anyone employing staff must comply with employment legislation. Important areas of legislation include recruitment, employment contracts, pay, working hours, holidays, employment policies, sickness, maternity, paternity, discrimination, discipline, grievances, dismissals, redundancies and employment tribunals.

Insurance for a classic car restorer

Contact an insurer and explain exactly how your business will operate - they will then explain what insurance cover you must have by law, and other cover you should consider. This might include:

  • employer's liability
  • public liability
  • vehicle trader's motor insurance
  • premises, premises contents and stock
  • cash
  • business interruption
  • product liability

A good motor trader's policy should cover you and your employees to drive any vehicle - whether it's stock, a courtesy car or a customer's car - at any time. If you're going to drive a car on the road under your motor trader insurance then you may need to upload its details to the Motor Insurance Database - your insurer will be able to tell you more about this. Check whether or not you're covered when a vehicle is being driven on private land - at your premises rather than on a public road, for example. Also make sure you're covered if something happens to a vehicle while it's in your care but not actually being driven. Make it clear to your insurer that the cars you will be dealing with are classic cars, often with a high value, rare, and needing difficult-to-obtain parts.

The Retail Motor Industry Federation (RMIF) offers its members specialist tailored motor industry insurance services at advantageous rates.

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