A leading industry accountant has warned of chaos in the run-up to the introduction of the £1 ATOL Protection Contribution on April 1.

The £1 levy will be added to ATOL-protected holidays and flights to provide consumer financial protection in place of the existing bonding system.

But a minority of companies will still have to supply bonds – including start-up travel firms, those holding ATOLs for less than four years and companies that have experienced problems.

These will struggle to secure bonding arrangements, according to White Hart Associates partner Chris Photi, who warns: “The travel bond insurance market has been decimated by the implementation of the APC. If you are trying to get a new ATOL bond by means of insurance, you can basically forget it.”

His warning coincides with publication of a summary of trade responses to a Civil Aviation Authority consultation on the new ATOL system.

The CAA reports broad support for the revisions, but some concerns – particularly over the requirement to make consumers aware of the protection provided. It notes the comments of one large licence holder that: “Changes would be required to booking systems to distinguish between ATOL and non-ATOL sales.”

The Federation of Tour Operators, ABTA and the Association of Independent Tour Operators also suggested ATOL holders would struggle to ensure that agents “act
correctly” when advertising or taking bookings on their behalf.

The FTO and ABTA have requested confidentiality measures to ensure that a requirement to notify the CAA of any changes in a business would not fall foul of stock market rules.

The associations welcomed a requirement for companies to appoint an ATOL compliance manager, but sought clarification of the manager’s obligations.

Almost a third of the 35 respondents expressed concern at the requirement to report to the CAA within 14 days of a payment, compared with the current 30 days.