The flight-plus Atol, due to be introduced next year to provide consumer financial protection on dynamic packages, will not make agents liable for VAT under the Tour Operators Margin Scheme (TOMS).
Kate Jennings, head of aviation policy at the Department for Transport (DfT), told an Abta travel law seminar this morning: “We are working closely with revenue and customs. Their position is there is nothing in the proposals that would make Flight Plus Atol holders liable for VAT.”
Jennings said: “We will include paragraphs on that in the forthcoming consultation.”
The DFT is poised to launch a three month consultation on the extension of the Atol scheme to high street and online retailers. Jennings said this would now be published in June.
She insisted the DfT still aimed to have the legislation in place by January, but senior industry figures now feel this is unlikely.
However, Jennings said: “The important thing is to get the reform right.”
Travel Republic managing director and Abta board member Kane Pirie told the seminar: “The proposals are rubbish and will be a disaster. Agents will probably seek to avoid them or move offshore. They will drive people to book unprotected arrangements and lead to more unprotected holidays.”
Thomas Cook head of industry and government affairs Andy Cooper said: “Until the question of airline bankrupcy is addressed, everything will be a fudge.”
Jennings declined to reveal any fresh detail of the proposals ahead of the consultation.