PART 4

January 2012

DISPOSAL OF VEHICLES WITH NO REALISABLE VALUE 

31.2.58 Disposal of vehicles with no realisable value – general

Even though a vehicle has no realisable value, it is not possible to simply abandon the vehicle as there are obligations on the owner of a vehicle (such as the obligation to tax and insure the vehicle) which, if not complied with, could result in a liability being incurred by the estate or the official receiver personally.

It is the case, therefore, that the official receiver must take positive action as regards the vehicle – which, in the vast majority of cases, will be to arrange for the vehicle to be scrapped.

 

31.2.59 ‘End-of-life’ vehicles and statutory requirements

The basis on which ‘end-of-life’ vehicles (this is what vehicles with scrap value only are known as in the legislation) are to be dealt with are set down in law, in Regulations [note 1].

These Regulations became fully effective on 1 January 2006 and have the effect of ensuring that the UK meets requirements in European agreements for the prevention, reduction and elimination of pollution caused by end-of-life vehicles.

 

31.2.60 Operation of the statutory provisions as regards end-of-life vehicles

The Regulations (see paragraph 31.2.59) operate by placing a responsibility on motor manufacturers to provide a process by which end-of-life vehicles can be disposed of in a way that is not harmful to the environment (largely, by recycling) and has no significant cost impact on the final owner of the vehicle.

This has been achieved by the establishment of a network of Authorised Treatment Facilities (ATF), who will recover and dispose properly of end-of-life vehicles, issuing a Certificate of Destruction to prove proper disposal.

The regulation apply to the following vehicles: 

• Passenger carrying vehicles up to 3500kg
• Light goods vehicles up to 3500kg (light goods vehicles)
• Three-wheeled motor vehicles (excluding motor tricycles)

Motorcycles are not therefore included, though it may still be possible to have an ATF agree to take such a vehicle.

 

31.2.61 Authorised Treatment Facilities

ATFs are the only facilities where an end-of-life vehicle can be disposed of legally and properly.  To provide a link between the ATFs, manufacturers and owners, there are two ‘umbrella’ organisations:

www.cartakeback.com  (see paragraph 31.2.64)

www.autogreen.org

Whilst ATFs are only obliged to take complete vehicles, given the high price of scrap metal it is likely that official receivers will be able to negotiate the removal and disposal of vehicle parts or parts of vehicles, if required.

 

31.2.62 Transport of end-of-life vehicles

It is likely that end-of-life vehicles may be considered to be hazardous or controlled waste (see Chapter), particularly where the vehicle is dismantled or otherwise incomplete.  The relevant legislation [note 2] [note 3], provides that all persons who transport hazardous waste (the transport of an end-of-life vehicle to an ATF, for example) are required to hold the appropriate waste transfer licence.  ATFs who carry out such collections are holders of the relevant licence.

If the official receiver uses any other agent for this, he/she should check that that agent holds the appropriate licence (see paragraph 32.1.8).

 

31.2.63 Practicalities of instructing an ATF – other than through Cartakeback

(Amended June 2012)

A list of Authorized Treatment Facilities ATFs is available from the environment agency website here.  If the official receiver requires a vehicle to be scrapped but is not using the services of Cartakeback (see paragraph 31.2.64) then an alternative ATF can be instructed in writing (by e-mail, letter or fax) to the ATF closest to the location of the vehicle, providing the following details: 

• Location of vehicle (postal address, in most cases including post code). Where it would assist in locating a vehicle, landmarks should be provided.
• Address and telephone number of the director/bankrupt.
• Description of the vehicle (make, model, colour).
• Registration number of the vehicle.
• Statement that the official receiver has power to deal with the vehicle by virtue of being liquidator of the company or is the legal owner of the vehicle (in the case of bankruptcy) by virtue of the vesting of the bankruptcy estate, or is dealing with the vehicle under his powers in the Act as receiver and manager [note 4].
• The vehicle registration documents (see paragraph 31.2.9), or details of the whereabouts of those documents.
• Any other relevant information regarding the vehicle or its location (such as an accessibility issues or the condition of the vehicle).
• Request that the ATF notify the official receiver if any costs are to be incurred and not to act until those costs have been agreed.

For instructing Cartakeback see instructions at paragraph 31.2.64.

 

31.2.64 Instructing Cartakeback (amended February 2013)

Whilst it is not mandatory for the official receiver to use the service provided by Cartakeback (CTB), The Service has agreed a memorandum of understanding with them, to deal with the disposal of unsaleable vehicles.  When instructed CTB will collect any complete vehicle, including motorcycles, and remit £50 for the benefit of the estate.  CTB will continue to collect any incomplete motor vehicle free of charge.   Where the vehicle is under ten years old, CTB will value the vehicle and, if that valuation indicates that the vehicle will generate more than £50 after a flat-rate auction fee of £150 plus VAT (£180), they will contact the official receiver and offer to auction the vehicle.  Assuming that permission is given to proceed, the net proceeds following the auction will then be remitted to the estate.

For CTB to consider a motor vehicle to be complete it should have all of its required components, e.g. engine, gearbox, wheels, bodywork, battery and catalytic converter (if originally fitted).  The vehicle does not need to be in working order for it to be considered to be complete.

To instruct CTB official receivers should use the www.cartakeback.com website.  Each office has been given login details but new users can be set up by contacting CTB on 08000 71 71 91.

Any monies due will be remitted monthly directly to EAS for allocation to the appropriate cases.

 

31.2.65 Certificate of destruction

A certificate of destruction is issued by the responsible ATF (see paragraph 31.2.61) to confirm to the last owner of an end-of-life vehicle that it has been destroyed.  The official receiver should request the certificate and keep a copy on the file.

The ATF can issue a certificate if there are no documents available for the vehicle, but would require a statement of ownership from the official receiver and be able to identify its identity from its vehicle identification number (VIN) (a number stamped on the chassis of the vehicle) or registration number.

 

31.2.66 Disclaimer of a motor vehicle

Give the comprehensive facility to dispose of a vehicle provided by ATFs (including Cartakeback – see paragraph 31.2.64), it is extremely unlikely to be necessary to issue a disclaimer of a vehicle.  That said, there are very limited circumstances where such a disclaimer will be appropriate.  If the official receiver is dealing with a vehicle that: 

• has no realisable value,
• is on private land not owned or leased by the insolvent, and
• the owner of the land is refusing access to the vehicle without the payment of storage charges (or similar), or
• the vehicle has no realisable value and has been abandoned overseas (subject to the guidance in paragraph 31.2.68), or
• the vehicle has been stolen and any related insurance claim has been made (see paragraph 31.2.7).

 

he/she official receiver may issue a disclaimer of the vehicle, following the guidance in Chapter 34. 

If the official receiver considers that any other circumstance warrants a disclaimer being issued in respect of a vehicle, application should be made to Technical Section (Technical.Section@insolvency.gsi.gov.uk) for permission to disclaim.

 

31.2.67 Service of notice of disclaimer

Notice of the disclaimer should be served on the DVLA and the owner of the land on which the vehicle is stored.

 

31.2.68 UK registered vehicle left overseas

Where the bankrupt claims that he has left a UK-registered vehicle overseas, it is unlikely to be worth the cost of recovering the vehicle to this country for sale.  Many EU countries have schemes to scrap ‘end-of life’ vehicles similar to those in the UK (see paragraphs 31.2.59 to 31.2.65) and the official receiver may be able to take advantage of such a scheme – seeking the advice of Technical Section where required.   

If the official receiver considers that the value of the car warrants a local sale, he/she should approach Technical Section for guidance on employing a local agent.

Otherwise, the official receiver should ask the bankrupt to confirm that the DVLA has been notified that the vehicle has been permanently ‘exported’.  If this has not been done the official receiver should carry out this process him/herself, following the guidance here.  The official receiver may then issue a disclaimer of the vehicle (see paragraph 31.2.66), with a copy of the disclaimer and certificate of export being served on any person with control of the vehicle in that other country.

 

31.2.69 Foreign registered vehicle left overseas

Where the bankrupt claims that he has left a foreign registered vehicle overseas, it is unlikely to be worth the cost of recovering the vehicle to this country for sale.  Many EU countries have schemes to scrap ‘end-of life’ vehicles similar to those in the UK (see paragraphs 31.2.59 to 31.2.65) and the official receiver may be able to take advantage of such a scheme – seeking the advice of Technical Section where required.  

If the official receiver considers that the value of the car warrants a local sale, he/she should approach Technical Section for guidance on employing a local agent.

Otherwise, the official receiver may issue a disclaimer of the vehicle (see paragraph 31.2.66), with a copy of the disclaimer being served on any person with control of the vehicle in that other country.

 

31.2.70 Refund of road fund licence

Where a vehicle is to be disposed of by an ATF, the official receiver should consider claiming a refund relating to the unexpired portion of the vehicle road fund licence (tax disc).  If the value of the unexpired portion is worth claiming, the ATF (or agent, as the case may be) should be instructed to send the tax disc to the official receiver once it is no longer legally required for the vehicle.

To apply for the refund the official receiver will have to arrange for the bankrupt to complete DVLA Form  V14, which must then be sent to the DVLA with the tax disc and section 9 of the registration document V5.  The bankrupt should be instructed to forward the refund monies to the official receiver once received.

 

31.2.71 Insurance to be cancelled following disposal

(Amended February 2014)

Assuming there is no outstanding claim in relation to the policy, any insurance taken out by the company or the bankrupt over a vehicle should be cancelled as soon as the vehicle is disposed of and any unexpired premium paid should be recovered from the insurance company.

Likewise, any insurance taken out by the official receiver over the vehicle should be cancelled in accordance with the guidance in paragraph 49.27B.

 

[Back to Part 3 – Sale of vehicles with realisable value] [On to Part 5 – Dealing with personalised (cherished) registration numbers]