Agents’ legal status is not be threatened by extension of Europe’s Package Travel Directive and has not been changed by Flight-Plus licensing, says the lawyer at the centre of recent court action over Atol.
Peter Stewart, partner at law firm Field Fisher Waterhouse, told an Abta travel law seminar in London: “Reports of the death of agents have been greatly exaggerated.
“Agents can continue to operate the agency model and to benefit from not being liable for VAT.”
Stewart led Abta’s High Court challenge to a CAA guidance note on dynamic packaging in 2006 which ended in the Court of Appeal.
He also successfully defended online travel agent Travel Republic against CAA charges of breaching the Atol regulations in 2009.
Former Travel Republic managing director Kane Pirie subsequently criticised the introduction of Flight-Plus licensing and slammed Abta for its stance on reform of the Package Travel Directive, suggesting expected changes would outlaw travel agents.
However, Stewart told the seminar: “The purpose of Flight-Plus is solely a financial protection purpose.
“The fact a company is a Flight-Plus arranger does not determine whether it is an agent or not. Genuine agents should not be nervous about liability for VAT.”
He said: “Similarly, the Package Travel Regulations don’t make it impossible for companies to act as agents.”
Referring to forthcoming reform of Europe’s Package Travel Directive which is expected to draw in Flight-Plus, Stewart said: “This will not remove the VAT advantage UK companies have” – although he added it would “start to remove some of the [other] advantages”.
But he said: “The key is that people must be genuine agents. You can’t rely on one or two bits of paper.
“If you’re not upfront and Her Majesty’s Revenue and Customs come in and want to see emails and correspondence, you can’t expect a great deal of sympathy.”