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Big Question: Setting the scene

Does the new Scrap Act disadvantage small traders?

With full enforcement of the licensing regime for scrap metal dealers now upon us, MRW has consulted the industry on how this might affect the smaller businesses in the sector.

The Scrap Metal Dealers Act 2013 aims to help reduce the marketplace for stolen metal, and make it much less profitable for thieves to steal metal from rail networks, churches, war memorials and priceless artwork. Many say the new law is essential to counteract this public nuisance, which disrupts transport and outrages local communities.

Each scrap dealer must now have a licence, but mobile traders have to obtain a separate licence for each individual council they wish to operate in.

When MRW reported exclusively that some councils were charging up to 10 times more for licences than others, concern was widespread. Less affluent traders and scrap yards, which rely on a high proportion of business from mobile traders, were particularly anxious (MRW.co.uk/8653934.article).

In terms of the administrative burden on the industry, opinion is strongly divided, with some regarding the effect as negligible and others reporting swamping levels of paperwork.

But most commentators agreed that the industry was in desperate need of regulation and a clampdown on cashless trading, of which significant amounts went largely untaxed for years. The ban on cash payments is now extended to mobile traders and motor salvage operators, while the economic viability of using cheques for smaller transactions is disputed.

The industry now waits to see how the police will enforce the law.

A final thought: If small traders do report less business, is this really a reflection on the Act successfully forcing out illegitimate trade?

The Act timeline

7 December 2012

The Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act comes into force. The cash ban also prohibits payments by postal order, gift voucher, mobile phone credit and foreign currency, with stricter requirements to record payments and seller details, and greater powers for the police to enter yards.

28 February 2013

The Scrap Metal Dealers Act 2013 is passed into law after receiving Royal assent. It was introduced as a private members’ bill by Richard Ottaway MP (Con), introducing a compulsory, local authority-run licensing regime for all scrap traders.

1 October 2013

Scrap metal dealers act comes into force taking over from the Scrap Metal Dealers Act 1964. Traders can use temporary licences for the next three months and the cash ban is extended to mobile collectors.

1 December 2013

Enforcement of full licencing regime. Temporary licences are no longer valid and all dealers must have a full licence in order to trade legitimately.

Big Question: Setting the scene

Readers' comments (2)

  • The use of "near cash alternatives" by some dealers is the main worry for companies that choose to apply the spirit of the cash-ban in it's true sense. We await the response of the authorities to clamp down on dealers who have initiated ways of paying "unseen" cash deals for scrap metals. Unseen by the authorities for now. With the intelligence gathering activities over the last 12 months there should be plenty of opportunity for rogue dealers to be closed down. A fair trading platform is all we seek. Stolen metals will still be traded whilst ever there are "near cash alternatives". Not to mention tax evasion!

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  • The cash for cheques has got to stop next. Looking at the crime figures so far then everything that has come unto place is a good thing. For admin costs we tell people there is a minimum requirement for payout otherwise we take a small percent off to cover the costs. The ball is now in the court of the police and local authorities to show us they can perform against the rogue yards and dealers.

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