Scrap metal is waste, so it is covered by the duty of care and carrier registration rules like any other waste. It is also covered by a separate licensing scheme run by local councils, which exists because of metal theft. Many small firms assume one cancels out the other. It does not. A sole trader with a van who collects old boilers and radiators needs a waste carrier registration, a scrap metal collector's licence from each council area they work in, and a transfer note trail for what they deliver. This guide explains how the licensing works in England and Wales and how it sits alongside the waste rules.
The Scrap Metal Dealers Act 2013
The Scrap Metal Dealers Act 2013 applies in England and Wales. It replaced the older Scrap Metal Dealers Act 1964 and brought motor salvage operators into the same licensing system. It gives local authorities the job of licensing scrap metal dealers, with powers to refuse, revoke and inspect.
You are a scrap metal dealer under the Act if you buy or sell scrap metal as a business, or if you carry on a business that includes collecting or processing it. That includes a yard, a mobile collector, and someone who recovers metal as part of another trade, for example a dismantler. Some activities that look similar sit outside the Act, such as a manufacturer who only sells its own metal offcuts. Check the current text of the Act and the Home Office guidance on gov.uk if you are on the edge of the definition.
Site licences and collector licences
There are two types of licence, and a business can need both.
Site licence
A site licence is for a business that operates from one or more fixed sites, such as a yard. The licence names the site or sites and a site manager for each. A licence applies to the sites listed on it, and if you add a site you need to tell the council and obtain the right authority. The council that issues the licence is the one for the area where the site sits, though a business with sites in several areas needs to look at how each council handles it.
Collector's licence
A collector's licence is for a person who goes door to door or otherwise collects scrap in the course of their business, usually from a vehicle. The key rule is that it only covers the area of the council that issued it. If you collect in three council areas, you need three licences. Councils vary in how they process applications and what they charge, because the fee is set locally.
If you hold a collector's licence you must display it (or a copy) on the vehicle, in a way that can be seen from outside. If you hold a site licence you must display a copy at the site. Authorities can also ask you to show it.
Both licences last for three years, after which you need to apply again. The Act also requires that licence holders notify the council of changes, for example a new site manager, a changed address, or a change in the people involved in the business.
Applying for a licence
Applications go to the local authority. The council decides whether you are a suitable person to hold a licence, and in doing so it may look at relevant convictions, including offences linked to waste, environmental protection and dishonesty. It can consult the police and the Environment Agency. You will usually be asked for the following:
- Your name and address, and for a company, the names of directors and the company details
- The site address and site manager, for a site licence
- Any other licences or permits you hold, including your waste carrier registration and, for a yard, your environmental permit or exemption
- Details of any past refusals, revocations or relevant convictions
- The fee, which each council sets itself
The application can be refused if the council is not satisfied that you are a suitable person. Councils can also revoke a licence if you breach the Act or if you cease to be suitable, and can add conditions. If you are refused or revoked, there is a right to appeal to the magistrates' court.
Payment rules and checking who you buy from
Two parts of the Act matter every day for anyone who buys scrap.
No cash. A dealer must not pay for scrap metal in cash. Payment has to be made by cheque, or by electronic transfer to a bank account held by the seller, and the dealer must be able to show the details. Buying for cash is an offence, regardless of how small the amount. This was one of the most visible changes when the 2013 Act came in, because cash payment had been the norm in the trade.
Verifying the seller. Before you buy, you must verify the seller's full name and address, using documents such as a driving licence or other suitable ID. You then record the details.
Both rules are about traceability. If stolen cable or lead turns up in a yard, the police want to know who sold it and how they were paid. A dealer who can answer both questions in minutes is rarely troubled.
Records you must keep
The Act requires you to keep records of metal you receive and metal you dispose of. For metal received, you need to record, for each transaction, a description of the metal (including type and weight), the date and time of receipt, the registration number of the vehicle it arrived in, the seller's full name and address, and details of the payment, including the cheque or bank transfer. You must keep a copy of the documents you used to verify the seller. For metal disposed of, you need to record what went out, when, to whom and for what price.
These records must be kept for three years, and must be available to be inspected by the police, the council or others with powers under the Act. Check the current Home Office guidance for the precise list of required fields.
These records are separate from your waste records. The two systems overlap but do not replace each other. See how long to keep waste transfer records for the retention periods that apply to transfer notes, which are shorter in some cases and longer in others.
Scrap metal and the waste rules
Scrap metal is controlled waste when its holder is discarding it or intends to, and in the great majority of cases scrap metal handled by dealers is treated as waste. That brings the usual obligations.
Waste carrier registration
A dealer or collector who carries other people's scrap in the course of business needs a waste carrier registration. Because it is other people's waste, this is normally the upper tier, as explained in upper tier and lower tier registration. The wider question is covered in who needs a waste carrier licence. Carrying only your own metal waste from your own job is a different position, and may fall under the lower tier.
Transfer notes
When you deliver scrap to another business, such as a processor, a shredder or a smelter, or when you receive it from a business customer, you need a waste transfer note describing it, with the EWC code, the quantity and both parties' details. Typical codes include 17 04 05 for iron and steel from construction and demolition, 17 04 07 for mixed metals, and 20 01 40 for metals from municipal collections. Check with your receiving site which code it expects, and see EWC codes explained.
When you buy from a private individual, the seller is not under a duty to complete a transfer note for household waste, but your records under the Act cover that purchase. When you then sell on to a processor, a transfer note is required. A regular load to the same processor can be covered by a season ticket, covered in season tickets for waste transfers.
Site authority
A scrap yard that stores, sorts, shears or bales metal needs an environmental permit, or must operate within the conditions of a registered exemption. A site licence from the council does not replace that. Permit conditions typically cover storage heights, drainage, fire prevention and dealing with contaminants such as oil. Small operations may qualify for exemptions with limits on quantity, as described in waste exemptions explained. Check the current exemption list on gov.uk for the activities you carry out.
Vehicles, batteries and other special cases
Metal arrives with contaminants, and some of these change the rules.
- End-of-life vehicles. Depolluting and dismantling a scrapped vehicle must be done at an authorised treatment facility, under the End-of-Life Vehicles Regulations 2003. A yard that buys cars for scrap needs to know how it will deal with fluids, batteries, airbags and catalytic converters. Motor salvage operators sit within the 2013 Act's licensing system.
- Fridges and electrical equipment. Old appliances are waste electrical equipment, and many contain refrigerant gases. They go to an authorised treatment route, not the shear.
- Asbestos-contaminated metal. Metal sheeting from old agricultural or industrial buildings can be asbestos cement, which is not metal at all. Do not break it up. See the rules on asbestos waste before accepting it.
Overlap with house clearance and trades
Plumbers, builders and house clearance firms often sell metal on as a side line. If you sell scrap metal you have collected on your jobs, you may be a scrap metal dealer for the purposes of the Act, even if it is not your main trade. Council guidance varies on where the line falls, so ask your local authority, and check the Home Office guidance, rather than assuming. If you clear houses, see house clearance businesses: waste carrier registration, notes and POPs for the wider picture.
Scotland and Northern Ireland
The 2013 Act covers England and Wales. Scotland and Northern Ireland have their own licensing and legislation for metal and second-hand dealers, run by local councils. If you operate across borders, check with the council for each area. The waste carrier registration and duty of care rules also differ, and in Scotland the regulator is SEPA. A short overview is in waste regulations in England, Scotland and Wales.
Penalties and what inspectors check
Councils, the police and environmental regulators all have an interest in scrap yards. Penalties for operating without a licence, paying cash, failing to keep records or failing to verify identity are criminal offences, with fines on conviction. The council can also close down a site in some cases. Environmental breaches, such as operating without a permit or a fire at a badly managed yard, are enforced separately.
On an inspection, expect to be asked for:
- Your licence, displayed as required
- Your purchase and sale records for the last three years
- Evidence of how you paid each seller
- Your waste carrier registration and transfer notes
- Your permit or exemption for the site
Try it yourself
Create a one-off transfer note without an account.