BUSINESS NEWS dominate discussion at association’s annual event in London. Ian Taylor reports

Multiple-contract Atol enables agents to retain their VAT status

High street and online travel agents can retain their agency VAT status while acting as a tour organiser or ‘principal’ when booking holidays under the 2018 Package Travel Regulations (PTRs) by issuing a multiple-contract Atol Certificate. Industry lawyer Joanna Kolatsis,

director at Temis Advisory, said: “Clients [agents] take responsibility for a package but say they act as agent for individual suppliers and have contracts in place [with suppliers] to indemnify themselves if something goes wrong. “It’s perfectly acceptable to the

CAA – it’s still a package.” Travel Republic customer

resolutions manager Kim Daplyn

Joanna Kolatsis

said: “Everything we sell is a multi-contract package. Te old Flight-Plus under the old PTRs is a multi-contract package with the new PTRs.” Damon Wright, PwC head of

travel and leisure indirect tax, confirmed: “It’s a way to still be an agent, [by telling] the consumer who they are contracting with.” Abta legal affairs director

Simon Bunce said: “Te Atol Certificate reinforces your status as an agent for the supplier.” It means agents are not liable

to pay VAT under the Tour Operators’ Margin Scheme (Toms) on a booking, despite having the same legal responsibilities for the package as a traditional operator. But Kolatsis noted: “Given the

expanded liabilities, agents need to make sure indemnities are in place because they are taking on quite a responsibility.”


Agents wanting to be certain of retaining their agency status to avoid paying Toms VAT should follow guidelines set out by David Bennett of Elman Wall Bennett. He advised:

Say you are an agent.

If you mark up the net rate, make sure agency contracts classify it as variable commission.

To give yourself the best possible agency position, make clear any cancellation fee you charge is the principal’s, not yours.

Notify the principal of the rate you sold a service for. You may not want to, but it is a powerful message.

‘Cancellation terms must be fair’

Companies can’t seek to profit from cancelled bookings and consumers are not bound by ‘unfair’ contract terms, regardless of what they sign. Tat is the message the

Competition and Markets Authority (CMA) aims to spread with its ‘Small Print, Big Difference’ campaign launched in April. Andrew Hadley, CMA consumer

policy assistant director, said research suggests: “Small and medium-sized businesses appear particularly unaware unfair terms can be struck down. A lot of people thought they could just impose cancellation fees. A lot thought ‘I can charge what I like’, and that is not true.” He told the Abta Travel Law

Seminar: “Deposits and cancellations are oſten a big issue for travel businesses. We don’t intend you not It’s absolutely OK

to cover your costs, but you should not make money out of cancellation fees

to have charges. Just ensure they work for consumers as well as you. It’s absolutely OK to cover your costs, but you should not make money out of cancellation fees.” Hadley insisted: “We’re not

looking for breaches. Te thinking behind the campaign is to raise awareness. Te point is consumer terms are not binding if they are not fair. Formal enforcement action is not planned, but it could be if we have concerns at the end of this year.”

Alexandra Cooke, associate at law

firm Hamlins, said: “Terms are unfair if they cause a significant imbalance in rights. You should not look at in financial terms.” She suggested: “Tink, would you sign up to these terms?” Abta senior solicitor Paula

Macfarlane said the association’s model terms and conditions “stood up well”, but Abta had recently made changes in consultation with the CMA. “First, we said a customer should make a complaint within 28 days. We amended that to say, ‘Complain as soon as you get home and ideally within 28 days’. Second, cancellation terms must involve a genuine assessment of costs. We

suggest a sliding scale.” › Travel Weekly is hosting a Business Breakfast with the CMA on the ‘Small Print, Big Difference’ campaign on

6 JUNE 2019 71

Monday (June 10) in central London. If you would like to attend, email:

Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80