“Put ATOL plans in place now”, law firm tells small businesses
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A law firm has encouraged small businesses to prepare for new ATOL arrangements now in light of the CAA looking to scrap the Small Business ATOL (SBA) scheme.
Thomas Eggar LLP warned businesses that they cannot advertise or accept bookings or payments without an ATOL and will need to think about their options should an industry consultation go in favour of ditching the scheme for a more vigorous approach.
If businesses decide to stay under ATOL membership they will need to make sure their finances are up to date, the firm added.
Yesterday the CAA said any changes would be phased over a number of years, with the consultation with the industry continuing until October.
Stephanie Beckett, solicitor at leading law firm Thomas Eggar LLP said: “Legally, ATOL membership must be held by all firms (except agents for ATOL holders) which sell: flight packages; flights plus overseas accommodation/overseas car hire; or flights where a scheduled airline ticket is not issued straight away.
“The proposal to abolish the cheaper Small Business ATOL (‘SBA’) and replace it with a stricter approach to financial assessment for ATOL (eligible firms with a turnover of GBP5 million) will lead many small businesses to look at alternatives, such as membership of an ATOL accredited body or franchise, teaming up with a recognised ATOL member so that the small business only advertises or sells services as an agent, or altering their business offering to take them outside of the ATOL regulation altogether.”
She added: “Failure to hold an ATOL means that firms cannot advertise or accept bookings or payments for services, and so small businesses should put measures in place now to ensure that they are properly licensed when the SBA is abolished. Small businesses that still require ATOL membership after the change in regulation next April should ensure that their financial records are clean and that they work with their auditors and accountants to ensure that they can properly evidence their finances.”
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