The Scrap Metal Dealers Act 2013 (the Act) repealed the Scrap Metal Dealers Act 1964 and Part 1 of the Vehicles (Crime) Act 2001 and created a new regulatory regime in 2013 which combined the scrap metal recycling and vehicle dismantling industries. This means that since October 2013 the separate licensing regime for Motor Salvage Operators is now incorporated into the new regime.

What is meant by “carrying on a business as a scrap metal dealer”?

A person carries on a business as a scrap metal dealer if they:

  1. Carry on a business which consists wholly or partly in buying or selling scrap metal, whether or not the metal is sold in the form in which it was bought  or
  2. Carry on a business as a motor salvage operator (so far as it does not fall into paragraph (a)).

For the purposes of (a) a person who manufactures articles is not regarded as selling scrap metal if that person sells scrap metal only as a by-product of manufacturing articles or as surplus materials not required for manufacturing them.

For the purposes of (b) a person carries on a business as a motor salvage operator if the person carries on a business which consists:

  1. Wholly or partly in recovering salvageable parts from motor vehicles for re-use or sale and subsequently selling or otherwise disposing of the rest of the vehicle for scrap
  2. Wholly or mainly in buying written-off vehicles and subsequently repairing and reselling them
  3. Wholly or mainly in buying or selling motor vehicles which are to be the subject (whether immediately or on a subsequent re-sale) of any of the activities mentioned in paragraphs (a) and (b) or
  4. Wholly or mainly in activities falling within paragraphs (b) and (c).

A scrap metal dealer is a person who carries on the business as a scrap metal dealer, whether or not authorised by a licence.

What is scrap metal?

Scrap metal includes:

  • Any old, waste or discarded metal or metallic material and
  • Any product, article or assembly which is made from or contains metal and is broken, worn out or regarded by its last owner as having reached the end of its useful life 

But the following are not to be regarded as scrap metal:

  • Gold
  • Silver, and
  • Any alloy of which two per cent or more by weight is attributable to gold or silver

Are there different types of licence?

Yes.  There are two types of licence – one for the site and the other for a mobile collector (for those carrying on a business otherwise than at a site).

Site licence

A site licence allows you to buy and sell scrap metal from a fixed location within the council’s area. Each site will have a nominated site manager included on the licence.

Collector's licence

A collector’s licence allows you to travel within the council area to collect scrap metal. You may not take this metal back to a site that you run within the council area to sell it.

You may only apply for one type of licence within each council area but you can apply to include multiple sites in that area on the one licence.  If you are a collector you will need a separate licence for each council area you collect in.

How long do the licences last?

Once granted a licence will last for three years and then lapse.  You will need to apply to renew it before it lapses.

What happens if circumstances change once I’ve been granted a licence?

Under the Act you are required to notify us of any changes which would materially affect the accuracy of the information you provided to us in the making of your original application. This has to be provided within 28 days of the changes occurring. You will be able to do this by applying to vary your licence. There is a fee for this.

The options for variation are:

 change of licensee’s details (name or address)

  • change from a site licence to a collector’s licence (or vice versa)
  • changes to the sites licensed (adding, removing or changing details)
  • change of site managers
  • change of vehicle on a collector’s licence

If you cease to carry on the business of a scrap metal dealer you must also inform us of that fact within 28 days.

Do I need to display my licence?

Yes. If you have a site licence you must ensure a copy is displayed at each site identified in the licence in a prominent place in an area accessible to the public.

If you have a collector’s licence you must ensure that a copy is displayed on any vehicle that is being used in the course of your business in a manner which enables it to be easily read by a person outside the vehicle.

Can I pay cash for scrap?

No. It is an offence under the Act to pay cash for scrap metal.  You can only pay by the following methods:

  • by a cheque which, under section 81A of the Bills of Exchange Act 1882, is not transferable, or
  • by an electronic transfer of funds (authorised by credit or debit card)

The Secretary of State may amend these provisions to permit other methods of payment in which case these guidance notes will be updated.

In operating as a scrap metal dealer what records am I required to keep?

The Act states a scrap metal dealer must record the following information:

  1. The description of the metal, including its type (or types if mixed), form, condition, weight and any marks identifying previous owners or other distinguishing features
  2. The date and time of its receipt
  3. If the metal is delivered in or on a vehicle, the registration mark of the vehicle (within the meaning of section 23 of the Vehicle Excise and Registration Act 1994)
  4. If the metal is received from a person, the full name and address of that person
  5. If the dealer pays for the metal, the full name of the person who makes the payment acting for the dealer

If the dealer receives the metal from a person, the dealer must keep a copy of any document which the dealer uses to verify the name or address of that person.

If the dealer pays for the metal by cheque, the dealer must keep a copy of that cheque.  If the dealer pays for the metal by electronic transfer:

  1. The dealer must keep the receipt identifying the transfer, or
  2. If no receipt identifying the transfer was obtained, the dealer must record particulars identifying the transfer

If a dealer disposes of scrap metal under a site licence they must record the following information:

  1. The description of the metal, including its type (or types if mixed), form and weight
  2. The date and time of its disposal
  3. If the disposal is to another person, the full name and address of that person
  4. If the dealer receives payment for the metal (whether by way of sale or exchange), the price or other consideration received

If a dealer disposes of scrap metal under a collector’s licence they must record the following information:

  1. The date and time of the disposal
  2. If the disposal is to another person, the full name and address of that person

The dealer must keep the information and other records mentioned above for a period of three years beginning on the day on which the metal is received or (as the case may be) disposed of.

A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level five on the standard scale.