Do I pay tax on scrap metal I sell as a tradesperson?

Yes. In 2026-27, scrap money from your jobs is business income, so record it with your other sales. In England, Wales and Scotland a scrap metal dealer can only pay you by crossed cheque or electronic transfer, never cash.

The rules below follow GOV.UK's record-keeping guide, the Scrap Metal Dealers Act 2013 and the Home Office's guidance on it, as checked on 19 October 2026. The Act covers England and Wales; Scotland has its own law with the same payment rule (Civic Government (Scotland) Act 1982, section 33A), and neither extends to Northern Ireland. The tax position is the same across the UK.

Why scrap money is business income

Plumbers, heating engineers, electricians and builders often take away old copper pipe, cylinders, radiators, cable and boilers, and weigh them in at a yard. If the metal came out of your work, the money is part of your trade, not a personal windfall. GOV.UK says self-employed people must keep records of all sales and income, and scrap is one of them.

It's sensible to agree with the customer on your quote who keeps old metal you take away, so there is no question later about whose it was.

When it counts

On the cash basis, the default for sole traders since 2024-25, income counts when you receive it. So scrap money goes in the tax year, and the quarter for Making Tax Digital, in which the yard pays you. If you use traditional accounting, it counts when you make the sale.

If you are in Making Tax Digital for Income Tax, the scrap money is part of the turnover in your quarterly updates. Keep the yard's weighbridge ticket or receipt with the payment, so each amount in your records can be matched to a sale.

The yard can't pay you in cash

Section 12 of the Scrap Metal Dealers Act 2013 says a scrap metal dealer must not pay for scrap metal except by a non-transferable cheque or an electronic transfer of funds. The Home Office guidance says there are no exemptions, and paying in kind with goods or services counts as paying. The offence is the dealer's, but it means every scrap sale should leave a trail in your bank account, and that trail is part of your records.

Dealers must also check the name and address of the person they take scrap from, against photo ID such as a passport or photocard driving licence (plus a recent bank statement or utility bill if it doesn't show your address), and keep a record, including the vehicle it came in, for 3 years. Councils and the police can inspect those records, so assume the yard knows what you sold and when.

Do you need a scrap metal dealer's licence?

Usually not, if the scrap is a by-product of your trade. The Act covers anyone carrying on a business that consists wholly or partly in buying or selling scrap metal. The Home Office guidance says tradespeople, giving plumbers and electricians as examples, will not need a licence if buying or selling scrap is an incidental part of their business. It says this is a question of fact for a court, which can look at how much of the business scrap makes up by value or volume.

If you start collecting scrap from other people, or scrap becomes a real part of what you earn, you may need a site or mobile collector's licence from your council in England or Wales. Gold, silver and alloys with 2% or more gold or silver by weight aren't scrap metal under the Act.

VAT

If you are VAT registered, VAT is due on scrap you sell, like your other sales; scrap isn't in the UK's domestic reverse charge. If a yard makes out a self-billed invoice for you, that needs a written self-billing agreement. If you are not registered, remember that taxable turnover includes it: you must register if your taxable turnover for the last 12 months goes over £90,000, or is expected to in the next 30 days alone.

Worked example

A self-employed plumber on the cash basis swaps 12 combi boilers in 2026-27 and takes the old copper and boilers to a licensed yard four times. The yard pays £180, £240, £150 and £210 by bank transfer.

• Income: £780 is added to the plumber's 2026-27 takings, in the quarters the transfers arrive.
• Records: each transfer is matched to the yard's ticket.
• Licence: no scrap metal dealer's licence, as the scrap is incidental to plumbing work. Carrying old boilers and pipework from jobs in the van does need waste carrier registration in England and Wales (Environment Agency or Natural Resources Wales).

This is an example only, with no VAT and no other income.

What this means for you

Scrap money is small but regular for many trades, and it is easy to leave out because it arrives away from your invoices. Because yards must pay by transfer or crossed cheque, it shows in your bank account, so leaving it out of your records is easy to spot.

Steps for scrap from your jobs

1. Record every scrap payment as business income, with the yard's ticket.
2. Take payment by bank transfer wherever you are, and take your ID to the yard.
3. Agree on your quotes who keeps the old metal, and register as a waste carrier before you carry it in your van.
4. If scrap becomes more than a sideline, check with your council whether you need a licence.

If you are in Making Tax Digital (MTD), the free MTD check shows when it starts for you, and the trades section has more guides on running a trade.