Scrap Metal Dealers Act 2013 – A Change for the Better?
As the Scrap Metal Dealers Act 2013 affects both scrap car merchants and customers looking to sell their ELVs (End of Life Vehicles), we have split this page up into two parts. You can read both, or just jump to the section that is relevant to you.
How Does the Scrap Metal Dealers Act 2013 Affect ELV Buyers?
As you would expect, the Scrap Metal Dealers Act 2013 has a greater impact on scrap car businesses than people who have a scrap car to sell. The intention of the law is to make it much more difficult to fence stolen metal and to ensure that accurate records of ELVs are kept. This could help to tackle metal crime and make it easier to measure recycling efforts. Whether the law is successful in either of these aims remains to be seen.
Made law in October 2013, the Scrap Metal Dealers Act 2013 means that scrap metal businesses can no longer use cash payments for scrap, need to be licenced, and must keep better records for traceability. Would you to know why the new law has come in?
Cash Ban means Cheques and Electronic Payments Only
The law prohibits the use of cash as payment for scrap metal of any type, including scrap cars. Instead, cheques or electronic payments have to be used, as these are more traceable. However, it is still legal to pay cash for damaged cars that can be repaired and made roadworthy again. What is the difference between a scrap car and a repairable car? That’s a bit of a grey area, but if you are thinking that you can pay cash for all your scrap cars and just claim they were bought to repair, think again. If you were not selling repaired cars in the past or are not selling a high enough ratio of repaired cars now, you will feel the long arm of the law before long.
Local Authority Licences
To comply with the SMDA 2013, scrap metal companies need to have a licence from the local authority (council).
If your scrap business has a site of operations, such as a scrap yard, you only need one licence per site. This is true even if you collect scrap from areas run by different councils. But if you are a mobile operator, with no site, you will need a separate licence for each area in which you work. The licences must be displayed prominently on all collection vehicles and also at each site.
Even though Scotland is not subject to the SMDA 2013, some Scottish companies are affected. If you are a mobile scrap business in Scotland and you collect from England or Wales, you will need a licence for each area that you collect from. If you have a site in Scotland, you do not need a site licence or licences for any areas in England or Wales.
What happens if you don’t have a licence? You can be made to stop trading by the police and local authorities.
Remove My Car understands that as there is a delay with the processing of licences, the authorities are allowing some businesses to continue operating without a licence. This is only a temporary measure and only applies if the business is fully compliant with pre-existing laws (Scrap Metal Dealers Act 1964 and Motor Salvage Operator Registration). We have heard of at least one registered Authorised Treatment Facility being forced to close temporarily as they were not registered as motor salvage operators. We presume that they will be allowed to trade again when the SMDA 2013 licences are issued.
Registration with Disclosure Scotland
No, this isn’t just for Scottish scrap businesses. In fact, it doesn’t apply to them!
To comply with SMDA 2013, scrap metal businesses need to register with Disclosure Scotland. Disclose Scotland is an organisation that can provide criminal records data to organisations. It is used to check that directors and managers are regarded as suitable.
For more details on Disclosure Scotland, visit
Keep Records of Purchases and Sales for 3 years
Scrap metal companies are now required to keep detailed records of all scrap metal purchases and sales. These records have to be stored for 3 years. The records can be used by police to trace vehicle and metal crimes.
The purchasing records need to include a description of the vehicle, its weight, distinguishing marks (if any), and the registration number. There also needs to be a record of the seller’s identification, name and address, and the payment details (date, amount, and the type of metal).
Less information is needed for sales records: weight, description, name and address of buyer, and details of the transaction (date, amount, and the type of metal).
If you sell to a licensed ATF, there will be a traceable record of the sale. This can be very useful if you are ever questioned by DVLA, an insurance company, or even the police about the vehicle you scrapped.
Police Powers to Enter Licensed Sites
Another important feature of the SMDA 2013 is that police and Local Authority officials can now enter a licensed site as long as they provide sufficient notice. This will help the authorities to crack down on the rogue traders that blight our industry.
How Does the Scrap Metal Dealers Act 2013 Affect ELV Sellers?
If you have sold a scrap car in the past, you may have been paid in cash and you may have run into problems when you tried to trace the sale. The Scrap Metal Dealers Act 2013 has changed all that. So what can you expect when you come to sell your end of life vehicle now?
You’re Going to Need Photo ID and a Recent Utility Bill
Whoever deals with the actual sale (the actual passing of the car and its documents over to the collection driver) has to present photographic ID and a utility bill that is less than three months old. This ID has to be for the seller, not the registered keeper (unless they are one and the same).
A British driver’s licence or a passport are the most commonly accepted form of photo ID. The utility bill can be from any energy supplier, but telephone bills are not allowed.
Forget All About Cash Payments – It’s Cheque and Electronic Payments Only
Are you expecting cash in hand, no questions asked? It’s not going to happen. Not with any reputable scrap dealer anyway.
You can only receive payment in the form of a cheque or an electronic payment such as a bank transfer. It is illegal to pay for an end of life vehicle with cash. (But it is still legal to pay cash for a car that will be repaired and sold on as a second-hand roadworthy vehicle).
The cheque and electronic payments mean that you may have to wait for the payment to be processed before you can access the money.
Be Prepared for Transaction Fees
Now that cash for scrap metal is banned, lots of scrap businesses are using specialist cashless payment systems. Unfortunately, some of these systems require you, the customer, to pay a transaction fee. That means the money you actually receive could be less than you expected (around £5 short in some cases!).
If you can, we recommend asking for a cheque payment or a bank transfer as you will get the full price for your car.
It Is Easier to Identify Reputable Companies
It is easier for you to find reputable, legal companies as licenced ATFs have to display their licences on collection vehicles and on their site. Also, you know that you should have to provide photo ID, a utility bill and should not be offered cash.
If a buyer is willing to pay cash for your scrap car or does not ask for ID, you should look to sell your ELV elsewhere. If they are willing to break the law, who knows where your car will end up?