What is a grey license plate car
“Grey registration is the usual term for a van that fiscally meets the interior requirements. It is not a different colour number plate. Keep the requirements for the vehicle separate from the conditions for tax benefits. Private use does not automatically exclude the motor vehicle tax entrepreneurial rate; benefit-in-kind additions and VAT corrections have their own rules.
The colour of the registration number
Despite the name, the number plate is simply yellow, just like other vehicles. The term “grey registration plate” refers to the grey registration certificate of the past. So today it is an administrative term and not a visual one. So you cannot tell immediately from the outside of the vehicle whether it falls under grey registration for tax purposes.
Conditions of the van
There are different tax-related layout requirements depending on the type of delivery van, including for double-cab models. A blanket ban on rear seats is therefore too categorical. Check the load space and layout for your specific model. To qualify for the MRB business rate, you must be registered as a business for VAT purposes, the van must be registered in your name, and you must use it for more than 10% of the kilometres driven annually for your business. This refers to kilometres, not the number of journeys. See the conditions for the business motor vehicle tax rate.
Vehicle tax in 2026 for electric vans
In 2026, electric vans will be subject to the full rate for that vehicle type. Separately, a temporary 50% reduction applies to vans with the business owner rate: during two three-month periods starting from the first period on or after 1 July 2026. As a result, the second period may extend into 2027. Check your assessment and the official temporary motor vehicle tax reduction.
Advantages
Assess each potential benefit individually: the van tax rate for motor vehicle tax, the bpm transitional arrangement, deductible expenses for income tax, and any VAT deduction. Merely having a commercial vehicle registration does not automatically grant the right to all benefits.
Low road tax
If your van qualifies as a grey registration for tax purposes, you will benefit from a lower motor vehicle tax rate. This benefit applies as long as the vehicle meets the equipment requirements and is used for business purposes. Especially for diesel cars, the difference with the normal rate for passenger cars can be considerable.
BPM and the transitional arrangement
For commercial vans with a first registration from 1 January 2025, the entrepreneurs' bpm scheme has been abolished. In the case of first registration no later than 31 December 2024, the transitional arrangement may apply under certain conditions. Purchase date and first registration are different details. Conversion of a passenger car after 1 January 2025 does not fall under this transitional arrangement. Read the conditions for BPM.
Deductible VAT
VAT deduction depends on, among other things, the invoice and use for taxed turnover. Private use requires a separate VAT adjustment. Home-to-work travel is business-related for income tax purposes, but private for VAT. Read the calculation at private car use and VAT.
Cons
Although the grey licence plate offers advantages, there are also disadvantages you need to consider as an entrepreneur. In particular, additional costs may arise when using the van privately. Below you can read what the main downsides are.
Taxable benefit for private use
Do you also use your company van privately? Then you get addition. If you have more than 500 km of private use per year, the tax authorities add a percentage of the catalogue value to your income. This increases your taxable profit. If you can prove that you do not drive more than 500 km for private purposes on an annual basis, you can avoid this, provided you can prove it with a mileage log.
Insuring a grey license plate car
Every van should have at least third-party insurance. Because you use it for business, you usually need business car insurance. This provides cover for use while working, transporting tools or materials. When taking out the policy, make sure you clearly state that it is for business use, otherwise the cover may lapse in case of damage.
Business insurance may be slightly more expensive, but it also covers risks you face as a business owner. Think of damage during loading and unloading or damage caused by employees using the car. It is also possible to take out additional cover, such as legal expenses insurance or goods insurance.
Private grey license plate car
An individual can own a van, but is not entitled to the commercial vehicle rate for motor vehicle tax (MRB). When transferring a van from the commercial BPM scheme to private use, residual BPM may be payable, depending on its age and conditions. Before purchasing, compare the motor vehicle tax (MRB), any potential BPM, insurance and running costs for the specific vehicle.
Frequently Asked Questions
What are the rules for a grey license plate?
The tax registration requirements vary depending on the type of van. To qualify for the MRB business rate, you must be registered as a business for VAT purposes, the van must be registered in your name, and you must use it for more than 10% of the annual mileage driven for your business. BPM, income tax and VAT each have their own conditions.
What is the difference between a grey and yellow license plate?
A grey number plate is more fiscally advantageous and intended for vans owned by entrepreneurs. The number plate is simply yellow, just like a private vehicle.
Is it possible not to pay an additional tax rate for a grey registration?
Yes, with a demonstrable maximum of 500 private kilometres on an annual basis, you do not have to apply an addition for income tax. The van exclusive business use declaration is a different route: that means you are not allowed to drive any private kilometres at all. Commuting is business for income tax, but private for VAT.
