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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.”


TAX ADVICE


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


travelweekly.co.uk 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: maisie.meehan@jacobsmediagroup.com


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