Abta has warned CAA proposals to reform the Atol scheme threaten major changes to most licence holders business and time is running out to respond.
John de Vial (pictured), the association’s head of financial protection, described the CAA’s proposals as “over the top” and said: “This will create a new regime for three-quarters of Atol-holders.”
The CAA aims to abolish the Small Business Atol (SBA) – held by 950 firms licensed for 500 or fewer bookings – and introduce new bonding and share-capital requirements, new “risk-based” financial criteria and revised Atol-reporting arrangements, including a licensed-practitioner scheme for accountants.
Many small Atol-holders will be required to increase their share capital from £30,000 to £50,000 – “a significant change”, said de Vial. There will be a new licensable-turnover minimum of £500,000, with a minimum bond for new starters of £75,000, up from £40,000.
De Vial warned this would “create an enormous barrier to entry”, saying: “82% of SBAs turn over less than £500,000 and 41% of all Abta-member Atol‑holders turn over less than £500,000. It looks like the CAA is turning its back on start-ups.”
De Vial added: “The CAA proposes a level of monitoring that has not existed before. It’s talking about profitability ratios, liquidity ratios, financial stability ratios and net working-capital ratios.
“But the consultation document does not include details. It’s silent on what the tests are, when we’ll see them and whether we’ll get to consult. How do we respond?
“The CAA also proposes that only licensed practitioners will be able to complete Atol returns. What are the costs involved?”
Abta issued a questionnaire on the changes this week – for return by September 12 – ahead of the CAA deadline of October 6.