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The Minibus Club

The minibus insurance specialist

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We have compiled the following minibus related information following our own background knowledge, we trust that you find the information relevant and informative. We have made every attempt to ensure its accuracy, however, in all instances this information is for guidance only and is not intended to be a substitute for any legal guidance. If you require more individual detailed knowledge and guidance it is recommended that you speak directly to the chosen authority in person

Minibus Permits

The minibus permit (or small bus permit) is the most vital concession given to community transport providers and operates as an alternative to the PSV regime. If an organisation operates a Public Service Vehicle (PSV) - meaning a motor vehicle, capable of carrying more than eight passengers, for hire or reward, that organisation will ordinarily be required to comply with a series of burdensome requirements including PSV Operator’s Licence and additional drivers’ licensing qualifications. The permit scheme was developed with not-for-profit organisations in mind and will allow such an organisation to operate the minibus without the need for a PSV Operator’s Licence.

So if an organisation operates a minibus for hire or reward, then it will need either a minibus permit or a PSV Operator’s Licence. In order to determine whether a permit or PSV licence is required a series of questions need to be asked.

1. What is for hire or reward?

   The interpretation of these words is extremely important and has in the past proved to be a significant stumbling block. Section 1 of the Public Passenger Vehicles Act 1981 sets out a definition of ‘hire or reward:

   1. A vehicle is to be treated as carrying passengers for hire or reward if payment is made for, or for matters which include, the carrying of passengers, irrespective of the person to whom the payment is made, and in the case of a transaction effected by or on behalf of a member of any association of persons (whether incorporated or not) on the one hand and the association or another member thereof on the other hand, notwithstanding any rule of law as to such transactions;
   2. a payment made for the carrying of a passenger shall be treated as a fare notwithstanding that it is made in consideration of other matters in addition to the journey and irrespective of the person by or to whom it is made;
   3. a payment shall be treated as made for the carrying of a passenger if made in consideration of a person’s being given a right to be carried whether for one or more journeys and whether or not he right is exercised.

   The key points to note are that it does not matter to whom a payment is made, whether the payment is made in consideration of other matters, or who makes the payment, so long as the operator receives a benefit. In practice a large number of different activities will fall foul of the strict application of this section.

   Examples:

   • ‘Free transport’ provided by hotels, airlines, event organisers. Here the payment is considered to form part of the overall charge for the services, which includes the carrying of passengers.
   • School minibus trips where the costs of the journey are not exclusively covered by the local authority. Such trips are increasingly being funded by a combination of local government funding and contributions or collections from parents or other interested parties.
   • Club trips which are funded by subscription or payments in order to take part in particular activities. This would not be the case if the vehicle is being used by members of an informal group (including the driver) who share the cost evenly.
   • Payment made to secure a person’s right to be carried even if that right is not exercised. It does not matter whether or not the person actually travels, only that payment is made for the carrying of a passenger.

   As much turns on whether the vehicle is being used for hire or reward, it is always advisable to seek further advice rather than make any risky assumptions that a given activity falls outside the bounds of hire or reward.

2. Who is entitled to make use of the permit scheme?

   The Transport Act 1985 creates the legal framework for the permit scheme. Section 19 of the Transport Act 1985 sets out the minibus permits, hence these are also known as ‘section 19 permits’ or ‘small bus permits.’ (The term minibus is not used or defined in the Transport Act 1985).

   The requirements to qualify for a permit are that the bus:

   • is being used by a body to whom a permit has been granted;
   • is not being used for the carriage of members of the general public nor with a view to profit nor incidentally to an activity which itself is carried on with a view to profit;
   • is being used in accordance with any conditions attached to the permit.

   ‘used by a body’

   The organisation (body), which is actually using the minibus, must hold a permit. This will not necessarily be the owner of the minibus. But since the permit will only be valid for use by the organisation to whom it was granted, if there is more than one user organisation, a permit would be needed by each respective user. This does not mean that subsidiary or affiliate members of the same group will need a separate permit, provided the permit is being used in accordance with any conditions. Bodies / organisations eligible for permits are those concerned with:

   • education;
   • religion;
   • social welfare;
   • recreation; or
   • other activities of benefit to the community.

   The final ‘other activities of benefit to the community’ eligibility is not easy to categorise, but it is designed to make the permit scheme available to a wide range of organisations.

   ‘profit / incidental profit’

   Although the legislation does not provide further guidance of what may be defined as profit or incidental profit it is an important condition since the permit scheme is meant as an alternative to the commercial PSV regime. It would be incoherent to allow commercial bodies to run minibuses under permits.

   Incidental profit is a similar concept to the payment in consideration for other matters as discussed above in relation to ‘hire or reward.’ So for example, a private school operating a minibus will be treated as operating the vehicle ‘incidentally to an activity which is itself carried on with a view to profit’ (namely the provision of education to fee payers) and so will not be entitled to a permit.

   For non-profit making bodies it is important to demonstrate that any charges made will do more than cover the direct vehicle running costs (this may include any necessary administrative and staffing costs as well as wages of driving staff provided they are directly attributed to running the vehicle) and should certainly not result in surplus income. Problems can be avoided by setting prices for any charges based on the actual vehicle running costs; this will show that charges were only intended to cover running costs and no more.

   ‘general public’

   Permit vehicles may not be used to carry members of the general public. This means that the organisation needs to be connected with the passengers to whom transport is being provided. Firstly, the passenger transport should be related to the organisation’s eligibility to hold a permit, for example a member of a church or a school pupil. Secondly, the carrying of any given passenger must comply with the operating conditions laid down by the authority responsible for issuing the permit. Each permit issued will specify the class of passenger who may be carried. These fall into five categories:

   Class A	Members of the body holding the permit.
   Class B	Persons whom the body exists to benefit, and persons assisting them.
   Class C	Persons who are physically or mentally handicapped or seriously ill, and persons assisting them.
   Class D	Pupils or students of any school, college or university or other educational establishment, and staff or other helpers accompanying them.
   Class E	Other class of persons specified in the permit.

 
Operators Conditions

The Traffic Commissioner or other body entitled to grant permits may attach further conditions that they consider appropriate. These conditions are likely to be limitations on the number of passengers that can be carried and maintenance arrangements.

Q. Where can a permit be obtained?
A: Permits for small buses (more than eight but not more than sixteen passengers) can be issued by local authorities’ transport departments and Traffic Commissioners (see section on Traffic Commissioners for contact details). Permits for large buses (more than sixteen passengers) can only be obtained from the Traffic Commissioners. A Traffic Commissioner will charge £8 for a small bus permit and £15 for a large bus permit. Local authorities and designated bodies are free to set their own charges to cover their costs.

Q. What needs to be displayed on the vehicle?
A: For each permit granted a disc will be issued. When a vehicle is being used under a permit the disc must be fixed to the inside of the windscreen so that it can be easily seen from outside the vehicle but does not obstruct the driver's view of the road. You may be issued with a number of permits but you can only use one vehicle at a time under each permit. You may move a disc from one vehicle to another as long as a small bus disc is not used with a large bus (a large bus disc may be used with a small bus). Discs may also be used in this way for hired vehicles. However, if you hire or lend your vehicle(s) to another non-profit making body they cannot use your permit. They must use the vehicle(s) under their own permit(s) and disc(s).