Scrap Metal Dealers Act 2013 - FAQs

Q1: Why was this Act brought in?
Q2: Who will enforce it?
Q3: How does a local authority decide if someone is "unsuitable" to hold a licence?
Q4: When will the Act come in?
Q5: What is the definition of a Scrap Metal Dealer?
Q6: What type of licence do I need?
Q7: How long do they last?
Q8: Why do the fees vary from one local authority to another?
Q9: I could be asked at short notice to pick up metal from an area where I don't have a collector's licence. What do I do?
Q10: Scrap metal collecting is only a small part of my business - do I still need a licence?
Q11: Are there any exemptions?
Q12: Do I still need a licence if I trade in metal but don't keep any metal on site?
Q13: Do skip hire companies need a licence?
Q14: Does a tradesperson need a licence?
Q15: What happens after I'm licensed?


Q1: Why was this Act brought in?

Increases in metal theft driven by the rise in commodity prices have had a wide ranging impact, and cost the economy between £220 million and £777 million a year according to two recent estimates. It has seen disruption to energy supplies, transport and telecommunications, as well as manhole covers stolen and war memorials desecrated. It has also highlighted how ineffective the regulation of scrap metal dealers dating from the 1960s has become.

Q2: Who will enforce it?

The Act gives local authorities the principal responsibility to regulate these industries. Local authorities have the power to refuse to grant a licence and revoke licences if the dealer is considered 'unsuitable'. The Act will also provide local authorities and police officers with suitable powers of entry and inspection.

Q3: How does a local authority decide if someone is "unsuitable" to hold a licence?

Unsuitability will be based on a number of factors including any relevant criminal convictions.

Q4: When will the Act come in?

Most of the provisions of the Act came in on 1 October 2013. However the full provisions will come in on 1 December 2013, after which action can be taken against any dealer who is unlicensed, or who is failing to comply with any of the legal requirements.

Q5: What is the definition of a Scrap Metal Dealer?

Section 21 states that a person carries on business as a scrap metal dealer if he "carries 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 carries on business as a motor salvage operator".

Q6: What type of licence do I need?

There are two different types of scrap metal licence. One is a site licence, the other a collector's licence. Collectors' licences cover dealers who do not have a site and regularly collect through door-to-door collections. A site licence allows the dealer to carry on business at any sites in the council's area listed on the licence, while the collector's licence allows a dealer to carry on business in a council's area.

Q7: How long do they last?

Licences will be valid for three years.

Q8: Why do the fees vary from one local authority to another?

Fees have to be set in order to cover administrative and compliance costs, and can include overheads and staff training. Councils can't aim to make a profit, and if they do, they have to adjust the fees at renewal time. Some councils will have fewer costs because, for example, they have lower overheads due to their location.

Q9: I could be asked at short notice to pick up metal from an area where I don't have a collector's licence. What do I do?

The Act is quite clear that a collector's licence issued by one local authority will not allow a dealer to operate in any other local authority area. A separate licence will have to be obtained from each council in which the dealer wants to operate. Although we have some sympathy with businesses caught by this, it is up to them how they manage this lawfully.

Q10: Scrap metal collecting is only a small part of my business - do I still need a licence?

You will need a licence if the buying or selling of scrap metal forms the whole or part of your business. However there may be circumstances where the buying or selling of scrap metal forms such a small part of your overall business dealings that you do not meet the legal definition of scrap metal dealer. In making a judgement as to whether a business needs a licence, we will consider the proportion of the business related to scrap metal in terms of value or volume.

Q11: Are there any exemptions?

Yes. Manufacturers selling scrap only as a by-product or as surplus materials not required for manufacturing will not need a licence.

Q12: Do I still need a licence if I trade in metal but don't keep any metal on site?

A person that buys or sells scrap metal "on paper" without actually operating a scrap metal site carries on business as a scrap metal dealer and will require a licence.

Q13: Do skip hire companies need a licence?

This will depend on the proportion of the business related to scrap metal in terms of value or volume. If a skip hire company places skips only at businesses/demolition sites to process and sell on the scrap metal this may be considered to be the whole or part of their business and therefore require a licence. However, a company that only rents skips to households where recoverable scrap metal forms a minor part of the skip contents the business may not require a licence.

Q14: Does a tradesperson need a licence?

Tradespersons such as plumbers or electricians will not require a scrap metal dealer's licence if buying or selling scrap metal is an incidental part of their business.

Q15: What happens after I'm licensed?

You will need to:

  • require all sellers of metal to provide personal identification at the point of sale, and record this detail
  • make sure you notify the local authority of any material changes in the information you have supplied in support of an application, for example if you have changed your trading name, or if you have ceased to trade in that authority's area
  • Display copies of your licence at each site in a prominent place where the public can see it
  • A mobile collector has to display a copy of their licence in any vehicle they use in the course of their business so that it can be easily read by a person outside the vehicle
  • From 1 October 2013, cash cannot be used by any scrap metal dealer to buy scrap metal. It is an offence to buy scrap metal for cash under section 12 of the Act and there are no exemptions. Only payment by a non-transferable cheque or an electronic transfer of funds will be acceptable. This will mean that the payment will be linked to a readily identifiable account, for both the payee and the payer. Cheque payments are acceptable within the cashless operating model but this is limited to non-transferable ("crossed cheques"), which are payable to a named individual(s) or firm and not made out to cash. The money will be paid to the intended beneficiary of the cheque
  • Dealers, site managers and employees must verify the full name and address of anyone they receive scrap metal from. This has to be done by checking documents, data or other information from a reliable and independent source
  • Dealers, site managers and employees have to keep a record of any scrap metal received or disposed of in the course of their business. For metal received the dealer has to keep the details of the date and time it is received, the registration number of any vehicle it was brought in and the name and address of anyone who brought it in. Dealers also have to keep copies of any documents they have used to verify the name and address of someone they have received metal from, and the cheque or receipt given when the metal is paid for. Where metal is disposed of, the dealer must keep a record of its description, the date and time of its disposal, and the name and address of any person it is sold to