With the collapse of Monarch Airlines the risk of travelling with ATOL protection is very much at the forefront of everyone’s minds. But what does this in fact mean?
Anybody selling qualifying flights or holidays must be ATOL bonded to enable them to trade and sell such products. Annually the Civil Aviation Authority require such businesses to submit their renewal paperwork, and then 2 documents must be reviewed and approved by a qualified Reporting Accountant under the ATOL scheme.
What does this mean though? There are new financial tests in place that the business must pass to enable them to renew their licence. In many cases Directors and Shareholders are being asked to invest heavily into their company by way of cash injection, confirmation of them leaving funds within the business, or converting their loan accounts into share capital so as to tie it up in the company. This is causing some real headaches for the smaller operators.
The reporting accountant is responsible for ensuring that the systems operated by tour operators are robust enough to capture all the necessary bonded bookings and ensuring that they pay the correct levy over. The ATOL levy of £2.50 per passenger is what has now enabled thousands of Monarch passengers to claim back their money directly from the Civil Aviation Authority.
The Authorities are relying on the registered accountants to provide them with the assurances as to the accuracy of these operators’ data.
Always be aware of whether your flight is ATOL bonded for your own protection in the event of airline failure. For more information on the scheme visit the CAA website
Nicholsons are registered with ATOL to undertake reporting accountant work. If you require advice around ATOL reporting please contact me on 01522 815100.