Josephides expects Atol reform to ‘make life tougher’

The expansion of consumer financial protection through reform of the Atol system will “change the lives of many” of those running travel businesses, according to Abta board member Noel Josephides.

The Department for Transport (DfT) is poised to reveal proposals for a new ‘flight-plus’ Atol that would extend protection – and the £2.50 levy on protected sales – to online retailers and travel agents who sell holidays packaged dynamically with separate flights and accommodation.

Sunvil managing director Josephides told a Tourism Society seminar in London last night: “The lives of some people running businesses will be changed.

“There are so many questions about the Atol reforms,” he said. “Will anyone be able to buy [supplier failure] insurance cover? Will the airlines be subject to some of the costs [of protection]?

“What will happen about VAT under the Tour Operator Margin Scheme, when we know [Her Majesty’s] Revenue and Customs is investigating companies that purport to be agents when it believes they are acting as principals? The change is very serious. It will determine people’s livelihoods.”

However, Josephides told Travel Weekly he welcomed the reform. “The tougher it is the better,” he said. “Companies have been able to get around consumer protection in the last few years. If the regulations are tightened and companies have to take responsibility for what they do, they will find life tougher.”

On Holiday Group chief executive Steve Endacott has led criticism of the expected changes, arguing they threaten to put retailers out of business if an airline fails.

However, Abta has broadly welcomed the reforms and made a plea recently for the industry to wait to see the proposals before passing judgment and the Association of Atol Companies has reiterated its support.

The DfT is now expected to release details in February, with the changes likely to come into effect next January following consultation.

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