The truth is that there is no national answer to this, because councils across the country have many variations.
Some councils issue both the nationally recognised MoT certificate and the local council compliance test at the same time.
Some councils only issue the compliance test certificate and claim exemption "G" of the national exemptions list.
NB: Exemption "G" is only valid if the council in question holds a certificate issued by the Secretary of State.
Some councils have only one test per year whilst others may have two or three tests per year.
Some councils have for example have CCTV, fire extinguishers, first aid kits as mandatory, and as such is part of their compliance test but not part of an MOT whilst others do not.
Some councils have a minimum and maximum age limit of vehicles, which forms part of the compliance test, but not part of the MOT, whilst others do not.
Some councils have a specified vehicle colour for hackney only, some have specified vehicle colour for private hire too, whilst others do not, so obviously this would form a part of the local compliance.
Some have restrictions on rear window tints, whilst others do not.
Therefore due to the fact that a compliance test merely indicates that the vehicle "complies" with local licensing conditions and although the test may well include the standard MoT roadworthiness checks, the simple fact remains that if a valid MoT certificate is NOT issued, then the vehicle is NOT subject to a valid MoT.
Is this legal? If the council holds a valid certificate from the Secretary of State, then YES it is legal
But there are issues such as
Insurance companies and even a local authority, have been known to say that if you use the vehicle for personal use (PLG) and not just for business use, then you must get an MoT in addition to the compliance test.
However, this is simply NOT true at all.
The vehicle is either mechanically roadworthy and exempt during the term of the license OR it isn't
The mechanical roadworthiness of a vehicle does not and cannot change depending on whether you are going shopping for yourself, or for a customer.
A compliance test will not be registered on the national database which means that your vehicle WILL be flagged up on any ANPR camera as not being subject to a valid MoT.
In addition to ANPR cameras, you will also not be able to tax your vehicle using the online vehicle tax renewal platform.
Is there a national exemption in place? Yes, but as above it is conditional, so is it really national?
This is a complex topic:
Let us know your thoughts - we will running a detailed feature in PHTM February issue including a full list of all councils with their requirements.