DO I NEED A LICENCE?

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CONTENTS

  • About this section
  • Why do car breakers need licences?
  • Am I a business?
  • Do I need a licence?
  • What licences do I need, how do I get one & how long do they last?
  • What is it? How to apply. How much does it cost?
  • Waste Carriers Licence
  • Scrap Metal Dealer Licence
  • Environmental Permit
  • Exemptions
  • Planning permission
  • Environmental permits
  • How to get an environmental permit
  • Transfer
  • New application
  • England & Wales
  • Environmental permit types
  • Standard Rules Permits
  • Bespoke permits
  • Pre-application advice
  • Making a new application
  • Standard Rules Permits
  • Bespoke permits
  • Other information needed for an application
  • Site plan
  • Fire Prevention Plan
  • Technical Competence
  • Management systems
  • Find out how much an application costs
  • Terminology, definitions & abbreviations
  • What are public registers?
  • Reporting a suspected illegal car breaker
About this section

The aim of this section is to provide some basic help & guidance, in a relatively simple easy to understand way, to anybody interested in becoming a legit car breaker.

This guidance is focused on recyclers that handle scrap vehicles, but most of it also applies for other types of scrap metal operation.

By ‘car breaker’ we really mean ‘vehicle recyclers’. That’s because:

  • Not all vehicle recyclers actually dismantle vehicles for parts – some just recycle the whole thing for its metal content
  • Nowadays vehicle recycling is much more complicated than it used to be
  • Our industry are proper recyclers, and
  • We don’t just recycle cars but also motorbikes, vans, HGVs etc. In fact, any & all types of metal containing object

This guidance tries to make the whole process of becoming a legit recycler a little bit easier to understand, but if you need more information you will need to contact the appropriate agency (good luck!).

Failing that, if you need more help (& you can’t get it from your local agency) then you will need a specialised consultant, as we don’t give consultancy advice.

The Vehicle Recyclers’ Association (VRA), works for its members, which all have to be properly permitted. We don’t provide free consultancy advice for non-members.

This guidance only covers getting licences – it does not discuss what you need to do to remain legal once you’ve got your authorisations.

We use the terms licences and permit interchangeably – it basically means the same thing.

We have tried to cover the subject areas for all of the UK & ROI but this is complicated by the fact that legislation is different in each area.

Why do car breakers need licences?

WHY IS THERE SUCH A FUSS ABOUT CAR BREAKERS, SCRAP YARDS & SECOND-HAND PARTS?

Firstly, because it is the law. In actual fact, there are many laws relating to waste, including some specific to scrap metal and ELVs.

There are 3 broad reasons why there are laws:

1.      Environmental

Vehicles that have been sent for dismantling/ scrapping, so called End of Life Vehicles (ELVs), are classed as waste.

These days, everything to do with waste is regulated by Governments, because of the harmful nature of the materials involved, and their effects on human health and the environment.  The larger the amount of waste & the more hazardous it is, the greater the risk of harm & the more carefully it has to be controlled. In the UK there are about 2 million ELVs every year – that’s 5,500 ELVs every single day.

Scrap cars are classed as ‘hazardous waste’ because they are especially complex products containing many materials that can be extremely harmful (for the environment & human health (e.g. can cause air and water pollution, cancer, fires etc).  So, at the end of their useful lives, scrap vehicles have to undergo decontamination (depollution) to remove or separate out some of the main problematic materials before they can be dismantled, scrapped and recycled.

So, in order to protect the environment, any person carrying out dismantling and scrapping must be ‘licensed’ by Government. These companies are called ELV ATFs – End of Life Vehicle Authorised Treatment Facilities.

Many licensed car breakers still don’t work to very high standards, but are at least subject to some control. Unlicensed scrap yards are not subject to any control at all so the risks from pollution are much higher.

Unlicensed car breakers also often work in the ‘hidden economy’ and cause lots of local nuisance problems for neighbourhoods.

2.      Business

Car breakers that operate within the law and obtain the necessary licences have to spend a lot of time and money on site, plant/ equipment, staff training & reporting.  They also have to pay tax, VAT, National Insurance, pension etc.

Unlicenced illegal breakers avoid all these legal responsibilities and so have an unfair economic advantage over licensed businesses.   They can pay more for vehicles than licensed businesses and can sell the parts for less. This is not fair. It undermines the businesses of licensed operators, meaning they cannot earn enough money to sustain and develop/ invest in their business. Ultimately it leads to falling work standards, corners being cut, accidents, pollution and crime.

This also leads to less tax being paid to Government, so undermines public services such as the NHS, schools & the Police.  That’s worth remembering.

3.      Crime

Businesses that break the law by not being licensed often break many other laws too.

Often they hide their identity and location and are involved in vehicle crime such as stolen vehicles or vehicle parts (such as high value body panels, engines, wheels, or catalysts).  Often money laundering is involved.

Many illegal car breakers do not pay tax or VAT, meaning that again they undermine licensed businesses.

Illegal dismantlers also often deliver very low quality services to customers, selling stolen, faulty or damaged parts, not giving refunds or invoices etc. This ‘tars the whole industry with the same brush’.

The amount of undeclared ‘cash’ in the hidden economy is huge.  Illegal UK car breaking businesses are thought to handle more than £ ½ billion every year. Everybody should be paying their fair share & contributing to maintaining our NHS, schools etc. Being an unlicensed car breaker is nothing to be proud of.

The licences and permits we will discuss are often formed from more than one bit of legislation.  For example, Environmental Permits for ELVs are the result of laws relating to waste generally (such as the definition of what is waste, the need for a permit etc.), and specifically ELVs (the regulations introducing the End of Life Vehicles Directive).

Am I running a business?

HMRC says that if you regularly buy anything with the intention of selling it, and that includes buying/ selling vehicles or vehicle parts then you are running a business.  So, you must be registered with HMRC for tax and, depending upon your turnover, VAT.

When deciding whether a person is operating a business HMRC looks at the pattern of behaviour including volumes & timescales in purchases, sales, advertising etc. (these are known as ‘badges of trade’).  It’s usually pretty obvious.

A person selling a few bits of auto memorabilia on-line, bought at car boot sales, is not likely to running this as a business.  However, someone with 100s of listings for modern car parts is clearly running this as a business (although that doesn’t necessarily make them either profitable or a car breaker).

It is also a criminal offence for a business to pretend that it is a private individual, and that includes using on-line platform ‘private’ accounts.

If you are a business, all your adverts and promotional/ marketing material (e.g. on your website, Facebook page, Gumtree adverts, ebay listings etc.) must make this clear and as a business you are required to display all your business details.

Tax evasion is the deliberate non-payment or underpayment of tax by individuals or businesses that is legally due to HMRC.  It is a criminal offence.

You can find more details about how HMRC define a business here: https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20201

If you are a business and you ‘handle or deal in’ scrap vehicles, or dismantle any type of vehicle - classic car or motorbike, vans, trucks, salvage vehicles, boats, buses, aircraft etc. - you will need at least one type of licence.

This is because scrap vehicles are classed as ‘waste’.

What if I only collect & deliver scrap vehicles?

If you just collect & deliver (transport) scrap vehicles you will need carriers licences (there are 2 types & you need both). This does NOT allow you to do anything else to the vehicle.

If you do anything else at all to a scrap vehicle (such as store them on a site, or take bits off while it’s on your truck) you will also need other types of licences.  Removing parts such as the catalyst, battery, alloy wheel, fuel, or any parts for resale is a waste treatment operation and is not allowed.

You cannot get a licence to dismantle vehicles on the back of a truck or at a residential address.

Whether you handle 1 scrap vehicle a month or 1 a day is irrelevant. It's still a waste vehicle and by handling it, you're carrying out a waste operation & so need a licence.

There are lots of very small vehicle recycling businesses with the correct permits, which are not quick, cheap or easy to get, & there needs to be a level playing field for everyone. In fact, most licenced vehicle recyclers handle less than 2 vehicles a day.

What if I want to dismantle my own vehicle at home?

Technically, if you dismantle your own personal vehicle at your home address (for example, because it failed the MOT, had an accident or a major mechanical problem), this is an illegal activity under Section 33 of the Environmental Protection Act 1990.

Apart from being illegal, dismantling a scrap vehicle at home can be very antisocial - causing lots of problems with your neighbours, landlord, local authority etc.  By doing so you are effectively acting as a waste business at a residential address which is not allowed - this can also invalidate your property insurance/ rental or tenancy agreement.

What if I only buy & sell auto memorabilia?

You do NOT need a waste licence for this.  But you may need to be registered with HMRC as a business & pay tax depending on how much you buy & sell. If you are operating as a business you need to make this clear in your adverts (including on-line listings) and have a business (rather than private) seller account, otherwise you’ll be breaking the law. In some parts of the UK there are also laws requiring sellers of second-hand parts to be registered with their local authority.

Naturally, as a business there is a legal requirement to keep records of all your sales and purchases.

What if I only buy & sell parts I bought from a car breaker/ ebay/ Facebook/ car boot sales?

If you buy & sell already dismantled parts purchased from a car breaker, such as a complete vehicle strip from Copart’s U-Pull It or ‘Bid to Break’, a ‘parts bundle’ from Salvage Market, or even individual parts from one or many car breakers, at car boot sales or on-line (e.g. ebay, Facebook) then you do NOT need a licence.

BUT, there are several things you DO need to do.

Most importantly, you should only buy parts from licensed car breakers, otherwise you will be participating in an illegal activity – potentially selling stolen or counterfeit parts – and could make yourself liable for criminal activities.

If you are operating as a business, you must be registered with HMRC. You also need to use a business seller account & make clear on all your adverts/ listings that you are a business.

You will need to obtain & keep receipts for all of the parts you buy, & you may have to provide these to the authorities to prove that you are not an illegal breaker.

What licences do I need? Where do I get them from? How long do they last?

In simple terms there are 3 bits of UK law for anyone collecting, transporting, storing and/ or dismantling/ recycling waste vehicles:

1. Environmental Permitting (environmental requirements)

2. Scrap Metal Dealers licenses (anti-crime requirements)

3. Waste Carrier Dealer Broker licence

What you need depends on what exactly you do, but to operate legally you will need at least 2 licences.

Transporting/ collecting/ moving ELVs

If you only transport waste vehicles*, you will need both a:

1.       Waste Carriers Licence from the EA, SEPA, NRW or NIEA

2.       A Collectors Scrap Metal Dealers Licence from your every local authority where you collect (although not currently in NI or ROI).

Moving ELVS & more

If you transport & do anything more with the waste vehicles (remove any items*) it’s more complicated & you will need:

1.       Waste Carriers Licence from the EA, SEPA, NRW or NIEA

2.       An environmental permit from the EA, SEPA, NRW or NIEA

3.       A site Scrap Metal Dealers Licence from your local authority (although not currently in NI or ROI).

What is it? How to apply? How much does it cost?

Carriers/ collectors licences

There are 2 types you need:

1.       Waste carriers licence (issued by your environment agency)

2.       Scrap metal dealer collectors licence (issued by your local council, see page 12)

The waste carriers licence is actually not just for waste carriers but for waste carrier, broker & dealer businesses, involved in:
  • transporting waste (a carrier)
  • buying, selling or disposing of waste (a dealer)
  • arranging for someone else to buy, sell or dispose of waste (a broker)
This licence doesn’t actually allow you do anything physically with the waste, other than buy, sell or move it. To ‘do’ anything with waste (such as sort, dismantle) you also need an environmental permit.

There are 2 types of waste carriers licence
  • Lower tier – if you only transport your own waste (that you have produced yourself, such as scrap metal waste produced as a result of your fabrication business*). This is FREE to register & does not expire.
  • Upper tier – if you transport other people’s waste (including waste vehicles that you have purchased to dismantle/ scrap).  This costs £154 & is valid for 3 years.
* If you buy waste vehicles (ELVs) with the intention of scrapping them, this does not make you the producer of the waste & so legally you cannot use a lower tier carriers licence for this.

Both types of licence are very easy to apply for on-line; it takes only a few minutes & you get your licence almost immediately.
 
ENGLAND. Apply here: https://www.gov.uk/register-renew-waste-carrier-broker-dealer-england
Cost: Initial application £154, renewal £105.

SCOTLAND. Apply here: https://www.sepa.org.uk/regulations/waste/waste-carriers-and-brokers/
Cost: Initial application £225, renewal £141

WALES. Apply here: https://naturalresourceswales.gov.uk/permits-and-permissions/waste-permitting/register-as-a-waste-carrier-broker-or-dealer/?lang=en
Cost: Initial application £154, renewal £105

NORTHERN IRELAND. Apply here: https://www.daera-ni.gov.uk/articles/registration-carriers-and-brokers
Cost: Initial application £152, renewal £76.

REPUBLIC OF IRELAND. Information not yet located.