The head of online travel retailer On Holiday Group has accused the Civil Aviation Authority (CAA) of delaying a forthcoming consultation on Atol reform.
On Holiday Group chief executive Steve Endacott made the accusation in a statement at the weekend, warning that reform of consumer protection may make agents liable for VAT on bookings under the Tour Operator’s Margin Scheme (TOMS). Endacott said he wants written confirmation that Atol-holding agents will not be liable for VAT.
However, the CAA immediately refuted Endacott’s charges. A CAA spokesman said: “It is not our consultation to delay or advance. It is under the control of the Department for Transport [DfT].”
Transport minister Theresa Villiers announced plans in February for a ‘flight-plus’ Atol to extend consumer protection to dynamically packaged holidays sold online and by high-street agents. The DfT is due to publish a consultation document on the proposals in early May.
Endacott said: “You wonder if the CAA is playing a clever game by delaying the release of the consultation paper.” He added: “As an industry we seem to be slowly accepting that flight-plus is inevitable. However, even this defeatist attitude requires the CAA deal with two fundamental issues. Atol should stand in front of credit card claims and HM Revenue and Customs [HMRC] should not levy TOMS VAT on agents with an Atol.”
Endacott argued: “Credit card companies run scared of travel, charging high clearance fees, delaying payment or even demanding high deposits as guarantees. If agents are going to pay £2.50 per passenger for Atol protection surely they have a right to demand customers are paid out by Atol.”
He went on: “The CAA has given verbal guidance that just because an agent has an Atol this will not automatically make them a principal [and liable under TOMS]. However, nobody seems willing to put this in writing. Agents would be mad to sign up for a flight-plus Atol without having this 100% clear.”
The CAA has sought to reassure the trade on this point. CAA consumer protection group deputy director David Moesli told Travel Weekly: “We want to ensure customers are financially protected. It is not our intention, or the DfT’s, to make people liable for TOMS.”
Endacott suggested Abta should consider making a claim against the CAA to the Office of Fair Trading (OFT) on the grounds that airlines selling holidays will not be subject to the Atol regulations. He said: “I wonder how the OFT would look upon an Abta claim of discriminatory practice against the CAA.”