How to start a removal business in the UK

Most guides on how to start a removal business open with a business plan template. Start here instead. If your van is plated at 3,500kg or under and you only carry customers' goods inside the UK, you do not need a goods vehicle operator's licence. That one line is why nearly every small removals firm in the country runs a 3.5-tonne Luton and stops there.

Everything after it (insurance, pricing, crew, tax, where the work comes from) is where firms go under. We have moved households out of Durham for eighteen years, one base, our own crew. This is what we would tell someone starting next month, including the parts that cost us to learn.

What you need before you take a penny

The paperwork is cheap. The van and the cover are not, and for a new operator the insurance usually decides which van you can afford.

The 3.5-tonne line, and why nearly everyone stays under it

You need a goods vehicle operator's licence once a vehicle has a gross plated weight over 3,500kg, or an unladen weight over 1,525kg where there is no plate. Below that, for UK work, you do not.

A restricted licence is no use to you: it covers your own goods only. Carrying other people's goods for money means a standard national licence.

That brings a nominated transport manager with a Certificate of Professional Competence approved by a traffic commissioner, and evidence of financial standing: £8,000 for the first vehicle and £4,500 for each one after, against £3,100 and £1,700 on a restricted licence. Over 3,500kg you also pick up drivers' hours rules, tachographs and Driver CPC. One caveat that catches removals firms out: the 3,500kg line only holds for UK work. Carry customers' goods for payment into or through the EU, Iceland, Liechtenstein, Norway or Switzerland and the threshold drops to 2,500kg MAM, so a 3.5-tonne Luton needs a standard international operator's licence, and since 1 July 2026 a smart tachograph 2 fitted to it as well.

Read that as a running cost, not a form: the transport manager is someone you become or someone you pay every month, and the financial standing is money that has to sit there, available, quarter after quarter.

So do not plan to grow into a 7.5-tonner. Plan to grow into a second Luton and a second crew. Two vans means being in two places on a Friday, and Friday is where the money is.

The van, and the number nobody works out

Payload is smaller than you think

Gross weight is 3,500kg. Kerb weight on a typical Luton is 2,290kg to 2,500kg, leaving roughly a tonne to 1,210kg of payload, and that includes the driver, the second man, straps, blankets and ramps. Two crew at 85kg each is 170kg gone before a box goes on.

DVSA allow about 5% leeway. A 0% to 9.99% overload is a £100 fixed penalty, 30% or more goes to court, and an overweight van gets an immediate prohibition. You are not driving away with somebody's house in the back.

Payload is weight. Customers ask about space, and you answer down the phone without going out to look. What fits in a Luton against a smaller van decides whether a job is one trip or two, and getting it wrong is how a fixed price becomes a loss at four o'clock.

What a mile really costs

In the week commencing 3 August 2026 the UK average pump price for diesel was 179.19 pence a litre: £8.15 a gallon. A loaded Luton returning 20 to 24 miles per gallon burns 34p to 41p a mile in diesel alone.

Add tyres, servicing, the Class 7 MOT, insurance and depreciation, and any mileage charge under about a pound means you are paying to drive. We charge nothing under ten miles, then charge the whole distance once a job goes past it. Cost recovery, not margin.

Insurance is four separate things, not one

Four distinct products, and people routinely buy one assuming it covers all four. Motor cover on the hire and reward class of use covers the van, not the goods inside it, and a carriage of own goods policy, which quotes cheaper because it is a different risk, does not permit the work at all. Goods in transit covers the customer's possessions against a per-load limit, often with caps on high-value items.

The limits are not the interesting part. The conditions are. Read what the goods in transit wording says about unattended vehicles, overnight security and items packed by the owner. Plenty of policies restrict damage to boxes the customer packed, which decides a large share of the disputes in this trade.

That clause is also the commercial argument for selling packing rather than bolting it on, and for teaching every new man how a box should be packed and loaded before he is trusted with a kitchen. Buy through a broker who writes removals, not a comparison form.

Pricing: build a rate card, not a rate

A single flat hourly rate is the default for new firms and it is wrong in both directions. A three-bed is three crew for most of a day plus dismantling. A sofa across town is two men for ninety minutes. One number cannot price both, and on the big jobs you lose.

We ran one all-in hourly rate for years and scrapped it in August 2026. The work arrives in three shapes and each wants its own model:

• Hourly, with a minimum, for small jobs: part-loads, single items, a flat. The minimum is not greed. A two-hour job still costs a driver his morning.
• Fixed by property size for local house moves. You survey, or ask enough questions to survey down the phone, and then you carry the clock risk instead of the customer. Get the questions wrong and you eat it, which is the discipline that makes you good at asking them.
• Fixed by route for long distance, fuel already in. Charging by the hour to sit on the A1 suits nobody, and a North East to London move is a fair template for how route pricing should read.

Then price what eats the day, separately and in writing: stairs without a lift, dismantling, second addresses, specialist items, packing. An itemised extra is a conversation before the van is loaded rather than an argument after.

Price your peaks as well: a firm charging the same on a Friday as a Tuesday is subsidising its busiest day with its quietest. Then publish the lot. Almost nobody in this trade does, which is exactly why it works: we put our North East prices in full on the site and a customer who has read them arrives already sold. Benchmark first, because removal prices vary by region and by pricing model and a rate that is fair in Durham is not fair in Surrey.

What an hour of crew costs you

Here is the arithmetic almost nobody does before buying the van. Start at the floor. The National Living Wage from April 2026 is £12.71 an hour for anyone 21 or over. Statutory holiday is 5.6 weeks: 28 days on a five-day week. So a full-timer is paid for 52 weeks and available for 46.4. That adds about 12%: £14.24 for every hour actually worked.

Then employer's National Insurance at 15% above £5,000 a year: roughly £3,200 for one full-timer at that wage. The relief people miss is Employment Allowance, £10,500 for 2026-27, which on those numbers absorbs the employer NI on your first three. One catch before you incorporate: a company whose only employee liable for secondary National Insurance is its sole director cannot claim it.

Now the number that sets your rate: how many paid hours you can invoice. Depot time, loading, the run out and the empty leg home are all paid, and none reach a customer's bill. Pay a man for 40 hours, invoice 25, and your £14.24 becomes £22.78. Two men is £45.57 an hour in wages alone, before diesel, van, insurance or a penny of profit.

Run the same sum on your own wage. Pay yourself nothing to keep the price competitive and you have not built a business. You have bought a van and a hobby with an MOT.

£90,000 of turnover is a ceiling, not a milestone

You must register once taxable turnover across any rolling 12 months passes £90,000. You can deregister below £88,000.

For a firm moving households that is a wall, because private customers cannot reclaim VAT. Cross it and either prices rise a fifth overnight or your income drops a sixth for the same work. £105,000 of turnover with VAT in it leaves about £87,500. Less than an unregistered firm turning over £88,000 for less graft.

There is a middle option before you panic. The Flat Rate Scheme is open while VAT taxable turnover is £150,000 or less, and the rate for transport and storage, which covers removals, is 10%. You still charge 20% but stop reclaiming input VAT; the gap is the point. Check the limited cost business test first. Goods under 2% of turnover, or under £1,000 a year, and your rate jumps to 16.5%.

Three options, then. Stay under deliberately and turn work away. Go past it fast enough that scale absorbs the 20%, via a second van, packing and commercial work where the customer reclaims it. Or shift the mix towards offices, landlords and agents. What you must not do is drift over, because the test is a rolling 12 months.

Employ your crew or subcontract them

HMRC does not care what the contract calls somebody. Status turns on the facts: control over what, where, when and how the work is done, a genuine unqualified right to send a substitute, and whether the worker carries real financial risk. Tell a man to be at an address at eight, in your van, carrying what you tell him to carry, and calling him self-employed does not make him so. Get it wrong and you both pay tax and penalties.

The difference shows on the job. A subcontractor is paid for the day; an employee is paid whether it went well or badly, so you can send him back to redo something without a negotiation.

It costs more, and the section above is the size of it. We run our own regular crew and have never used subcontractors. The most expensive decision this business has made, and the reason the same faces turn up.

If you do subcontract, check their hire and reward and goods in transit cover yourself and keep a copy. The customer's contract is with you: when a subbie puts a wardrobe through a wall, it is your name on the complaint.

Where the work comes from

In rough order of return for a new firm working one town.

1. Google Business Profile and reviews. It costs nothing and there is no way to buy a better local ranking: Google ranks on relevance, distance and prominence, and reviews feed prominence. Ask on the day, while the van is on the drive.
2. Agents. Households move every few years; letting agents, estate agents and conveyancers move people every week. One agent who trusts you beats any directory subscription.
3. Paid social. Measurable, unlike most of this list. Over one recent 30-day run we spent £657 on Meta for 79 enquiries: £8.32 a lead, cheapest in the 45 to 54 band at £3.73. Those are leads, not bookings.
4. Lead sites and directories. You are usually buying a lead three competitors bought too. Fine for a gap, poor as a foundation.

Before any of it, decide what you say when the phone rings. Read the questions we tell customers to ask a removals firm and have an answer to each in one sentence: fixed price or estimate, insured for how much, employed crew or agency.

Then work your local calendar, not the national one. Student moves in a city like Durham stack a fortnight of small, dense jobs into June and another into September. A different business from family removals, and one a new firm with a single van can fill a summer on.

Who should not start a removal business

Every guide on this is written by somebody selling a course, a franchise or a lead subscription. Here is what they leave out.

• If you want an asset rather than a job, this is not it. One van and one crew is a job you own and cannot take a fortnight off from. It becomes a business at the second van, and that is the hard one.
• If your back is already going, do not start. It is stairs, in the rain, with somebody else's sofa, every day, for years.
• If you cannot say no, you will lose money. The grand piano. The five-bed with a forty-minute carry from the nearest legal parking. We refer grands out and survey five-beds rather than quoting blind.
• If you need money this month, do not start this month. The van, the cover and the diary all come before the first invoice.

One legal point before you take an online deposit. A consumer who contracts with you at a distance gets 14 days to cancel. You may start work inside that window and charge for it, but only if they asked you to and were told they would lose the cancellation right once the work was fully performed. Leave that out and the 14 days stretch to a year.

And the line a competitor would not write. If you are setting up in Durham to compete with us, fair enough. This trade has room for anybody who turns up when they said and charges what they quoted. It has none for a firm revising an estimate once the van is loaded.

If you read this far because you are moving house rather than starting a firm, none of it is your problem. Get a fixed price in two minutes and let somebody else do the arithmetic.

Questions people ask