Trading as a scrap metal dealer
Exemptions from the Scrap Metal Dealers Act
Is my business exempt from the Scrap Metal Dealers Act 2013?
Businesses that generate income from the sale of scrap metal as a result of another business or function may be exempt from licensing.
If scrap metal is a by-product of your business, you may be exempt from the need to be licensed. It will be necessary for you to prove the proportion of your business that consists of dealing in scrap metal.
Examples of businesses that may be able to claim exemptions are:
- Builders
- Plumbers
- Electricians
- Motor vehicle repair garages
- Engineering workshops
- Where scrap metal is recovered or produced as the result of the main purpose of the business
- Skip hire companies*
*Skip hire companies may need a scrap metal dealers licence depending on the proportion of income generated from selling scrap metal.
Courts will apply the reasonable person test when assessing whether the trading scrap metal is wholly or partly the focus of the business, or whether it is an incidental function. It could be interpreted that all skip hire companies, who sell any metal recovered from the returned skips, carry on a business partly buying or selling metal. However, the income generated from the scrap metal sale would need to be a core component of the total income, compared with the income generated from the rental of the skip. For example, a skip hire company who places skips only at businesses or demolition sites to process and sell on the scrap metal may well have an income of which the profits from the scrap metal sale are a core component and therefore will require a licence. Therefore, a company that only rents skips to households where recoverable scrap metal forms a minor part of the skip contents will necessarily require a licence.
It will be a question of fact for a court to decide whether under all the circumstances the buying or selling of scrap metal forms the whole or part of a person's business, or alternatively, whether the buying of scrap metal forms such a minimal part of their overall business dealings that they do not meet the legal definition of scrap metal dealer. There are many factors a court may consider in reaching its judgement, such as the proportion of the business related to scrap metal in terms of value or volume.
Last updated: 05/06/2024 14:59
