Agents ‘could be breaching package travel rules’

| July 05, 2019, 08:19

Abta is concerned agents could be acting in breach of the Package Travel Regulations (PTRs) by mistake or bringing sales within the regulations that don’t need to be.

A year on from the introduction of the PTRs, the association highlighted two changes, including one related to leisure bookings formerly classed as Flight-Plus.

Abta head of legal services Simon Bunce said: “We’ve seen companies that believe the new Linked Travel Arrangements [LTAs] are ‘Flight-Plus’ and that they can carry on as before. That is not the case.

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“[What were] Flight-Plus bookings fall within package protection, with package‑holiday liability.”

Under the old regulations, Flight-Plus Atols permitted agents to sell and financially protect flights and accommodation or car hire without attracting package-holiday liabilities. But combining services from two or more suppliers in this way is a package under the 2018 regulations.

Bunce said: “We come across people who don’t know Flight-Plus is now a package.”

Agents do remain exempt from liability for VAT under the Tour Operators’ Margin Scheme (Toms) on this type of booking – as they did with Flight-Plus – so long as they issue a Multi-contract Atol Certificate identifying the suppliers of the separate services.

But Bunce said: “Introduction of the Multi-contract Atol added a level of complexity. There are people who think it’s an LTA, and the CAA does not cover LTAs, and therefore they believe they don’t need an Atol.”

He added: “An LTA is different – don’t get confused.”

John de Vial, Abta’s director of financial protection and financial services, said: “The CAA was trying to be helpful [with the Multi-contract Certificate]. Agents were keen on it from the tax point of view. [But] some individuals have not got their heads around the thing.”

It was feared the PTRs’ introduction of LTAs would confuse consumers. De Vial told Travel Weekly: “We have members declaring LTA sales and we’re bonding that. But it’s really very small.

“Our members have an aggregate turnover of £39 billion [but LTA sales are] tens of millions.”

However, he noted: “Most of last summer’s bookings would have been sold under the old regime. It will be another year before we really get a picture.”