New Abta guidance to members on acting as agents for consumers spells out the challenge facing anyone who goes down this route to avoid a Flight-Plus Atol.
At least one major online retailer is expected to switch to booking flights as an agent for consumers – making bookings on behalf of clients rather than selling seats – and others may do the same to escape the cost of the Flight-Plus Atol required from January to cover sales of non-package holidays.
However, Abta’s guidance warns it will not be enough for companies simply to declare they act as an agent for the consumer.
Agents will need to forego any payments from suppliers, disclose any charge for their services and declare their earnings for VAT.
The association says agents will need to “make the consumer aware of all relevant available travel services, particularly those at the lowest cost” and will not be able to operate from a preferred providers lists without the consumer’s agreement.
“Any payments you are offered or receive from travel service providers must be disclosed,” says Abta. “You must not make any secret profit through remuneration or commissions … or through undisclosed mark-up.”
Abta suggests: “It is essential you clarify your tax position … in particular, in relation to VAT.”
It warns: “It is an offence to hold yourself out as being able to sell or make available flights or package holidays if you are trading as agent for the consumer.”
The association also says agents may need to inform consumers of the absence of financial protection for holidays.
The Department for Transport has argued acting as agent for the customer may cause “considerable detriment” for customers and said businesses “need to make customers aware … [they] will not receive statutory financial protection”.
However, leading industry lawyer Peter Stewart of Field Fisher Waterhouse told a recent Abta law seminar: “There is no requirement to say to a customer, ‘You don’t have Atol protection’.”
Stewart said: “In many ways, agent for the customer is more consistent with web transactions … The practice has been going on for some time … It is fine so long as it is clear.”