• Regulation 35(4) of the Road Vehicles (Registration and Licensing)
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Regulations 1971 states that a motor trader must not use a motor vehicle under a trade licence other than for a business purpose and one of the authorised purposes listed in that regulation.
The test or trial of a vehicle or its accessories and equipment in the ordinary course of construction, modification, repair or after completion is an authorised purpose.
You do not say how far away your driver lives from your place of business, or if it is a place where you would normally test a vehicle. Neither do you give any indication of what conversation, if any, took place between your driver and the police about why the driver had taken the vehicle home.
Without knowing the full story it is not possible to say whether the police were right or wrong.
In relation to the seat-belt, you do not say what kind of vehicle was being driven and whether or not it was fitted with seat-belts. But the basic requirement is that if a vehicle is fitted with seat-belts they have to be used.
Exemption is provided for a person riding in a vehicle used under a trade licence for the purpose of investigating or remedying a mechanical fault in the vehicle. The important word is "riding" and I consider it has been used instead of "driving" with the intention of excluding the driver.
In my view, the legislation envisages the investigation and remedying being carried out by a passenger—not the driver.