The Civil Aviation Authority will target unscrupulous traders after the removal of ATOL bonding.
The Government gave the formal go-ahead to the proposed £1 levy on ATOL-protected holidays this week in a statement by undersecretary of state for transport Jim Fitzpatrick.
This will trigger a fresh consultation with the trade on detailed proposals next month.
The new ATOL Protection Contribution will come into force on April 1, replacing the system whereby tour operators provide bonds to compensate customers in the event of a failure.
However, a senior industry source warned the new system would allow greater scope for fraudulent trading, since a company could take customers’ payments for three months before coming to the CAA’s attention when required to pay the APC on bookings.
“Some people will need to be subject to enhanced reporting,” said the source.
Federation of Tour Operators director-general Andy Cooper agreed, but said: “The CAA has the discretion to require certain operators to pay more frequently.”