Scrap metal dealing

Background

Over the last few years there has been a huge increase in metal theft driven by the rise in scrap metal values.  Metal thefts have resulted in a wide range of impacts on society and huge costs to the economy.  It has seen disruption to energy supplies, transport and telecommunications, as well as manhole covers stolen and war memorials desecrated.

To combat this, the Government has introduced new legislation and produced a new licensing regime for scrap metal dealers.  The Scrap Metal Dealers Act 2013 has repealed the Scrap Metal Dealers Act 1964 and Part 1 of Vehicles (Crime) Act 2001 and introduces a revised regulatory regime for the scrap metal dealing and vehicle dismantling industries.

Scrap Metal Dealers Act 2013

From 1 October 2013 the Scrap Metal Dealers Act 2013 replaced the Scrap Metal Dealers Act 1964 and Part 1 of the Vehicles (Crime) Act 2001 (in relation to Motor Salvage Operators).

The Act gives Local Authorities the power to better regulate these industries by providing a power to refuse to grant a licence and a power to revoke a licence if a dealer is considered 'unsuitable'.  Unsuitability is based on a number of factors including any relevant criminal convictions.  The act provides Local Authorities and Police officers with suitable powers of entry and inspection.

Key features of the act include:

  • A requirement for all individuals and businesses to complete an enhanced application process to obtain a scrap metal dealer licence. Local Authorities will have the power to turn down unsuitable applicants.
  • Empowering Licensing Authorities to revoke a licence, if appropriate.
  • Requiring all sellers of metal to provide personal identification at the point of sale, which is then recorded by the scrap metal dealer.
  • Making it an offence to pay for metal with cash.
  • New powers for the Police and Local Authorities to enter and inspect sites.
  • A central public register, hosted by the Environment Agency, of all individuals and businesses licensed as scrap metal dealers
  • Widening of the definition of a scrap metal dealer to include motor salvage operators.

The Act makes it a requirement for a scrap metal dealer to have a licence in order to carry on in business as a dealer.  It is an offence to carry on business without obtaining a licence, and anyone convicted can be fined at level 5 on the standard scale (up to £5,000).

There are two types of licence specified in the Act:

  • Site Licence: 
    All sites where a licensee carries on business as a scrap metal dealer have to be identified, and a site managr has to be named for each site.  This licence allows the licensee to transport scrap metal to and from those sites from any local authority area.
     
  • Collector's Licence: 
    This allows the licensee to operate as a collector in the area of the issuing Local Authority.  It does not allow the collector to operate in any other Local Authority area, so a separate licence has to be obtained from each Council the collector wishes to operate in.  The licence does not authorise the licensee to operate a site; to do so they will need a site licence from the relevant local authority.

It should be noted that a scrap metal dealer can only hold one type of licence in any one Local Authority area.  They have to decide whether they are going to have a site or a collectors licence in any one area. They cannot hold both a site and collector's licence from the same Council.

Licence Fee Table:

Site Licence (3 Year)

£526.75

Collector’s Licence (3 Year)

£236.50

Renewals (after 3 year licence expires)

As above

Major Variation (changing from collector to site)

£290.25

Minor Variation (name/address changes)

£36.00

Copy of Licence

  £18.00

Eligibility & definitions

What is a scrap metal dealer?

The 2013 Act defines a scrap metal dealer under Section 21 of the Act as someone carrying on a business which consists wholly or in part of buying or selling scrap metal, whether or not the metal is sold in the form in which it is bought.  However a manufacturing business that sells scrap metal created only as a by-product of the processes it uses, or because it has a surplus of materials, is not caught by this definition (see s21(3)).

A dealer also includes someone carrying on business as a motor salvage operator. This is defined as a business that:

wholly or in part recovers salvageable parts from motor vehicles for re-use or re-sale, and then sells the rest of the vehicle for scrap
wholly or mainly involves buying written-off vehicles and then repairing and selling them off
wholly or mainly buys or sells motor vehicles for the purpose of salvaging parts from them or repairing them and selling them off.

What is a Mobile Collector?

A collector is defined by Section 22 of the act as a person who carries on business as a scrap metal dealer otherwise than at a site, and regularly engages in the course of that business in collecting waste materials and old, broken, worn out or defaced articles by means of door to door visits.

What is Scrap Metal?

Scrap metal itself 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 holder as having reached the end of its useful life.  This definition is not intended to include second hand goods, but these could be caught by the definition if they are made from or contain metal that is broken or worn out.  It will be a question in each case as to whether items fall within the definition.  The definition does however include platinum and a range of other rare metals now being used in catalytic converters although gold or silver are not included in the definition of scrap metal.  Jewellers or businesses trading in second hand gold and silver jewellery or products are not therefore caught by this definition.

What is a Site?

A site is defined in section 22 of the Act as:

"any premises used in the course of carrying on business as a scrap metal dealer (whether or not metal is kept there)".

Due to the wording of the definition this means that someone who trades in scrap metal and is thus defined as a dealer under section 21(2) will need a site licence for their office even if they do not operate a scrap metal store or yard.

Applying for a scrap metal dealer licence

Information required in an application includes:

  • full details of the applicant or applicants
  • full details of the company if applicable (including registered office and details of all directors)
  • a basic criminal disclosure for the relevant personnel (see link below)
  • the address of each site in the district/borough that is used
  • bank account details
  • The fees are detailed above, in the Licence Fee Table, and a licence lasts for three years.
  • Scrap Metal Dealer Licence Application Form
  • Online application form GOV.UK
     

Guidance, Advice and External Links

It is the responsibility of potential applicants to fully satisfy the requirements of the Scrap Metal Dealers Act 2013.  You can find a quick guide to the Act here:

Guidance for Scrap Metal Dealers

A copy of the Home Office Supplementary Guidance, which accompanies the Act can be found here:

Home Office Supplementary Guidance

A copy of the Scrap Metal Dealers Act 2013 can be found at the National archive website:

Scrap Metal Dealers Act 2013

A basic criminal disclosure can be applied for here:

Disclosure Scotland - Basic Disclosure online

If you have any queries or questions, please contact us at the Health, Safety and Licensing Team on 01273 294429 or email us at ehl.safety@brighton-hove.gov.uk