Guidance issued on scrap metal cash ban

By Will Date

Practical guidance on how scrap dealers will be subject to the cash ban when trading scrap metal have been published by the Home Office, ahead of the introduction of the ban on December 3.

In a document released on Tuesday (October 23), the Home Office states that scrap dealers will only be permitted to pay for material by cheque or through electronic transfer of funds or be subject to punishment.

Metal dealers will be banned from paying cash for scrap from December 3
Metal dealers will be banned from paying cash for scrap from December 3

If found to be in breach of the ban, the paying company, the employee responsible for making the payment and any management staff who have failed to take reasonable steps to prevent payment being made will all be guilty of an offence.

As of December, scrap dealers will also be required to keep more detailed records of all scrap transactions, including keeping a copy of a named cheque or a print out receipt of an electronic made for each piece of scrap sold.

Any recorded scrap deals for which payment details can not be produced will be found to be illegal.

Moves to outlaw the cash trade in scrap were announced by Home Secretary Theresa May in January under the Legal Aid, Sentencing and Punishment of Offenders Act (see story), which received Royal Assent in May.

The Act also raised the maximum level of fines available for offences under the existing Scrap Metal Dealers Act. The measures are intended to undermine the market for illegally obtained scrap, following reports of a spate of thefts across the UK, which is estimated to cost the economy around 1 billion per year.


Significantly, in the new guidance, the government pledges to back further amendments to the Scrap Metal Dealers Act being pushed through Parliament by Conservative MP Richard Ottaway.

Mr Ottaway, whose Private Members Bill is due to receive its third reading on November 9, is proposing to remove a loophole in the cash ban which exempts itinerant scrap dealers from having to comply, alongside a host of other measures to tighten licencing laws around operating scrap yards.

Metal recyclers claimed that the exemption for itinerant scrap dealers could penalise legitimate metal dealers who are compliant with the cash ban, and may serve to push the trade in metal underground (see story).

Despite resisting calls to remove the loophole in the LASPO Act, the Home Office claims that the legislation is intended to act as a first step in reforming the industry, and backs the proposed changes set out in the Scrap Metal Dealers Bill.

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Home Office guidance

In its guidance, the department states: Significantly, the new legislation would also remove the existing record-keeping exemption which relates to some itinerant collectors who, until this legislation comes into force, will be excluded from the cashless provision.

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