Can't prove VAT status - anyone really had a problem

[RAI]

Re: Can\'t prove VAT status - anyone really had a problem

[ QUOTE ]
In that case who has commited the offense?

[/ QUOTE ]Case 1: the importer does not tell the new owner. New owner pleads innocence.
Case 2: The new owner commissioned the importer to fetch the boat for him. New owner pleads innocence.
Case 3: The boat was stolen in the USA and the importer needed to get it shifted fast. New owner pleads innocence.

I don't think the new owner is in that good a situation in any of the cases when the authorities turn up.

 

[RAI]

Re: Can\'t prove VAT status - anyone really had a problem

And if the boat is so old it comes in the "VAT deemed paid" pre RCD category?

 

[slipknot]

Re: Can\'t prove VAT status - anyone really had a problem

Tranona, unfortunately that is precisely whet their advice is. Both from HMRC and the RYA legal dept.

I am not currently using the PC which holds my correspondence with the RYA and HMRC. (I am unfortunately decorating my study!) As soon as it is back on I will post the correspondece which states that they believe the debt attaches to the asset, and that it is possible (but unlikely) that HMRC could sieze the boat several private transactions after a suspect outstanding VAT payment.

They particularly refer to several liens, which could obtain under certain specific circumstances. None of which refer to VAT. When pressed on which lien obtains in the the case of VAT they cannot answer beceause there is no such thing and the advice they provide is simply incorrect. To date, no one has produced the law which says that HMRC can seize my boat in order to meet someone elses VAT liability.

 

[slipknot]

Re: Can\'t prove VAT status - anyone really had a problem

Tranona, here is the info I recieved from RYA legal........

The VAT liability is against the boat and HMRC have the power to seize the goods upon which the VAT liability accrued. If, in your scenario, Mr A absconds and Mr B’s boat is seized and sold to realise the VAT liability, Mr B may have a civil claim against Mr A for breach of contract.

I have attached some information on liens which may help to explain the situation a little more clearly insofar as certain debts remain with a boat regardless of the change in ownership. It should be noted that HMRC has extensive powers and rights. If you would like details you will need to contact HMRC direct.

LIENS:
A lien gives rise to a right against an asset which belongs to another, until certain demands by the lien holder have been met by the owner. In the case of a possessory lien, this is a right to retain possession; in the case of maritime and statutory liens, it is a right to place an enforceable charge over the vessel.

A lien holder may apply to the Court to arrest the vessel unless and until security equal to the amount claimed is deposited with the Court, or the claim is settled.


MARITIME LIENS:
A maritime lien is a form of charge which attaches to a vessel. It follows the vessel even when sold by the owner in whose hands the debt or liability first arose, to purchaser who has no knowledge of it. Such a lien may arise from damage done by the vessel, salvage, crew or captain’s wages and disbursements (necessary purchases made by the captain for the vessel's immediate operation).

The lien holder will also remain entitled to pursue the original debtor or the vessel itself.

A maritime lien takes priority over a mortgage on a vessel, even if the mortgage was in place when the lien arose.


POSSESSORY LIENS:
A possessory lien arises where a yard, marina, or salvor has undertaken work and retained possession of the vessel. The lien holder must have and retain possession of the vessel (until it is transferred to the Admiralty Marshall as is required). Once the lien holder has lost possession (unless by fraud or duress) the lien is not revived by his re-taking possession, but provided the lien holder retains possession, the lien will survive any sale, and the disadvantaged purchaser will then almost certainly have a claim against the original debtor.


STATUTORY LIENS:
Statutory liens include the following, being the two most likely to be encountered:

1. Claims for loss of life or personal injury caused by a defect in a vessel or her equipment, or in consequence of a wrongful act of the owners or other operators.

2. Claims in respect of goods, repairs or materials supplied to a vessel for her operation or maintenance.

Unlike maritime and possessory liens, the enforcement of statutory liens is limited by ownership: any action to enforce a statutory lien may be brought against the vessel only if the liable person was the owner of the vessel (or charterer or otherwise in possession or control of the vessel) when the claim first arose, and is still the owner (or charterer etc) when the Claim Form is issued.

A mortgage takes priority over a statutory lien, even if the lien was first in time, unless a Claim Form against the vessel, based on the claim which gives rise to the lien, was issued, prior to the mortgage.


PRIORITIES:
In terms of establishing priorities, the relevant date is the date on which the mortgage is granted. In the case of a registered mortgage (against a registered vessel) the date of registration will become relevant, but only as against other registerable interests of owners and mortgagees.


GENERAL:
Where the lien arises from damage done by the vessel, the claimant must establish negligence or lack of care by the skipper or owner for a claim against the vessel to be successful.

Even if the owner has chartered the yacht or left it in the hands of the boat yard, a lien will attach if the circumstances indicate that the person in control at the time of the incident was acting within the scope of authority granted by the owner and with his consent.

There are a number of claims that do not give rise to liens of any nature. These generally include claims for design and survey fees, yacht management and brokerage fees and legal/accountancy fees, although exceptions will arise when, for example, legal fees have been incurred in recovering or preserving the vessel.


ARREST:
The Admiralty Marshall on behalf of the Admiralty Court is responsible for the arrest of vessels: Room E203, Royal Courts of Justice, Strand, London WC2A 2LL. Tel: 020 7947 6111 - Fax: 020 7947 7671.

An application for arrest must be made to the Admiralty Court in London who may issue a warrant for the arrest and detention of the vessel unless and until bail equal to the amount of the claim, together with a reasonable sum for costs, is deposited with the Court.

If an improper arrest has been made, the Court will penalise the person responsible by awarding costs against him and, in a flagrant case, order him to pay damages.

Once a vessel has been arrested and detained, or bail and security for costs has been lodged with the Court, the case will proceed to a hearing in the normal way. If the vessel remains under arrest, an application may be made to have the vessel valued and sold pending final judgment. Such an application is likely to succeed if the vessel is in danger of depreciating significantly during the ensuing proceedings.

Any arrest is an expensive exercise and unless your claim is for a substantial amount you are likely to be better off issuing proceedings against the original debtor in the County Court or against the Vessel in the Admiralty Court.


CAUSE OF ACTION:
The following circumstances will entitle a person to maintain an action against not only the owner of a vessel but also the vessel itself, and hence give rise to a right of arrest:

1. Any claim to the possession or ownership of a vessel or to the ownership of any share therein;

2. Any question arising between the co-owners of a vessel as to possession, employment or earnings of that vessel;

3. Any claim in respect of a mortgage or charge on a vessel or any share therein;

4. Any claim for damage done or received by a vessel;

5. Any claim for loss of life or personal injury sustained in consequence of any defect in a vessel or in her equipment, or in consequence of the wrongful act, neglect or default of the owners, charterers or persons in possession or control of a vessel; or the master or crew of a vessel, or any other person for whose wrongful act, neglect or default the owners, charterers or persons in possession or control of a vessel are responsible, being an act, neglect or default in the navigation or management of the vessel, or in the loading, carriage or discharge of goods on, in or from the vessel.

6. Any claim for loss of or damage to goods carried in a vessel;

7. Any claim arising out of any agreement relating to the carriage of goods in a vessel or to the use or hire of a vessel;

8. Any claim in the nature of salvage, towage, pilotage;

9. Any claim in respect of goods and materials supplied to a vessel for her operation or maintenance.

10. Any claim in respect of construction, repair or equipment of a vessel or in respect of dock charges or dues;

11. Any claim by a master or member of the crew of a vessel for wages;

15. Any claim by a master, charterer or agent in respect of disbursements made on account of a vessel.

The law surrounding liens is complex and if you find yourself involved in some form or another with them, you would be well advised to contact a marine lawyer.

For more information kindly contact the RYA Legal Department on 0845 3450373 or legal@rya.org.uk


Disclaimer:
The RYA Legal Department provides generic legal advice for its members, affiliated clubs and RTCs. This leaflet represents the RYA’s interpretation of the law. It takes all reasonable care to ensure that the information contained in this leaflet is accurate. The RYA cannot accept responsibility for any errors or omissions contained in this leaflet, or for any loss caused or sustained by any person relying on it. Before taking any specific action based on the advice in this leaflet, members are advised to check the up to date position and take appropriate professional advice.

mep/leaflets/Liens & Arrest]