Who needs a Licence?
In order for anyone to carry on business as a scrap metal dealer they have to have a licence. These licences will last for three years. Trading without a licence is a criminal offence.
If convicted of trading without a licence the offender can be fined. The fine will be at Level 5 on the standard scale. Amendments to the size of the fines that courts can impose in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 mean that when the provisions come into force, a fine at that level will be unlimited.
Consequently, anyone considered to be a “Scrap Metal Dealer” will require a licence. It is therefore necessary to consider what Scrap Metal actually is, before considering more particularly who is a Scrap Metal Dealer. The definitions provided within the Act are set out below:
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. 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
Who is a Scrap Metal Dealer?
The Act defines a scrap metal dealer 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:
(i) 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
(ii) wholly or mainly involves buying written-off vehicles and then repairing and selling them off
(iii) wholly or mainly buys or sells motor vehicles for the purpose of salvaging parts from them or repairing them and selling them off.
Dealers under the legislation are further divided into two categories based on the two different types of licence (set out at Section 4 below): those operating from fixed sites; and those who are mobile collectors:
(i) Fixed Sites - A site is defined in the Act (s22(9)) 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 s21(2) will need a site licence for their office even if they do not operate a scrap metal store or yard.
(ii) Mobile Collector - A collector is defined (by s22(4)) 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.