Do you have to pay tax on scrap copper? What a tradesperson declares, and why the yard cannot pay cash

Yes. Money you get for scrap copper, lead or brass taken off your jobs is income of your business, and it goes into your turnover with everything else you are paid. Since 1 October 2013 a scrap dealer in England and Wales has not been allowed to pay you in cash, so every sale leaves a bank record with your name on it.

Why it counts as income

HMRC's notes for the self-employment pages of the 2026 tax return define turnover as "the total amount received (cash basis) or earned (traditional accounting) by your business before taking off any expenses". The list that follows starts with "all payments", whether by "cash, card, cheque or any other method".

The notes do not mention scrap by name, and we found no GOV.UK page that does. The definition does not need to. The old cable came out of a job your business was paid to do, you sold it, and the yard paid you.

The question has its own thread on ElectriciansForums.net, started on 12 November 2022. One of the first replies makes the practical point: scrap dealers no longer work in cash, so there is an electronic trail of who they have paid.

The £1,000 allowance does not rescue it

A reply in the same thread suggests running the scrap as a separate side business and covering it with the £1,000 trading allowance. HMRC's notes close that off in two ways.

First, the allowance is one figure for everything. The notes say that if you have more than one self-employment, "the total amount claimed cannot exceed £1,000".

Second, it replaces your expenses. The notes say that if you claim the trading income allowance "you cannot deduct any allowable expenses". GOV.UK puts it the same way: the allowance is used "instead of deducting any expenses". A sole trader with £20,000 of materials, van and tool costs would give up all of that to shelter £1,000.

So for anyone already trading, the allowance is the wrong tool. The scrap goes in turnover and you claim your real costs as usual.

What it costs

The tax is the same as on any other pound of profit. For the 2026 to 2027 tax year GOV.UK gives 20% Income Tax on income from £12,571 to £50,270 and 40% from £50,271 to £125,140, with Class 4 National Insurance at 6% on profits over £12,570 up to £50,270 and 2% above.

A sole-trader electrician on £41,000 of profit who weighs in £600 of copper over the year owes £120 Income Tax and £36 National Insurance on it, £156 in all, and keeps £444.

Scrap money is also turnover for the Making Tax Digital test, which looks at income before expenses. If you are near £50,000, see who is in Making Tax Digital.

What the yard has to do

These rules come from the Scrap Metal Dealers Act 2013, which applies in England and Wales. They bind the dealer, and they are why the sale is traceable.

Scotland and Northern Ireland have their own rules, which we have not read for this page.

Do you need a scrap dealer's licence?

Usually not. The Home Office guidance to the Act, last updated in January 2023, says tradespersons "will not require a scrap metal dealer's licence if buying or selling scrap metal is an incidental function of their business (e.g. being a plumber or electrician)". It adds that this is a question of fact for a court, based on how large a part scrap plays in the business. If you start buying scrap from other firms to sell on, ask your council before you carry on.

Carrying it in the van

In England a business that transports waste must register as a waste carrier, and GOV.UK says you can get an unlimited fine if you do not. The free lower tier covers a business that carries only its own waste, but the Waste (England and Wales) Regulations 2011 take construction and demolition waste out of it, and "construction" there includes improvement, repair and alteration. Cable and pipe stripped out on a job are waste from that kind of work, so a trades firm carrying them needs the upper tier, which costs £191.02 for three years. Wales, Scotland and Northern Ireland have separate registers. Our guide to what a trades firm pays in registration fees has the full list.

Each load of non-hazardous waste also needs a waste transfer note "or a document with the same information, such as an invoice", kept for 2 years.

What to do

1. Say in your quote who keeps removed materials. Clause 7 of our terms and conditions template has the wording.
2. Have the yard pay your business account, not a personal one, so the money lands where your records are.
3. Keep the yard's ticket and enter the sale in your books the same day, as you would an invoice. GOV.UK says to keep records of "all sales and income" for at least 5 years after the 31 January deadline for that tax year.
4. If staff take scrap to the yard for the firm, set the payment up to the firm's account in advance.
5. Include the total in your quarterly update and your return. Our invoice maker for trades covers the rest of your sales.

This is general information, not tax advice. If the scrap is a large part of what you earn, or you trade through a limited company, ask your accountant how to record it.