Accounts Rules

The Accounts Rules are part of ABTA’s Articles of Association. Their purpose is to determine whether appropriate bonding levels have been set for Members. They make a significant contribution to the financial wellbeing of the ABTA membership as a whole, and so improve the business environment in which Members operate.

Applicable Risk Turnover (ART)

This is your total turnover as a retail business, excluding: all foreign currency; 90% of sales of rail tickets issued under an ATOC agreement; 90% of sales of air tickets issued under an IATA agreement; and sales of scheduled stage fare bus and coach tickets within the British Isles.

Arm’s-length trading

Trading with connected companies or persons on the same terms as would apply to unconnected parties.

ATOL (Air Travel Organisers’ Licence)

An ATOL is a licence to sell air transportation which provides financial protection for the consumer. If you are acting as a principal and sell a package that includes air transportation, then UK law requires you to have an ATOL. If you are in any doubt as to whether you should hold an ATOL, you should contact the CAA (Civil Aviation Authority), CAA House, 45-59 Kingsway, London WC2B 6TE; telephone 020 7379 7311.

Billing and Settlement Plan

For details please contact IATA.

Bond

A bond is a formal undertaking from an approved bank or insurance company to pay a sum of money to ABTA in the event of the Member’s financial failure, primarily for the purpose of reimbursing customers who would otherwise lose money which they had paid. The provision of a bond is an acceptable method of complying with the statutory requirements for customers’ financial protection under the EC Directive on Package Travel (The Package Travel, Package Holidays and Package Tour Regulations 1992-SI 3288/1992).

Bond obligor

A bank or insurance company which issues a bond.

Breakage deposits

Refundable deposits paid in advance to cover the cost of breakages, e.g. at a villa or apartment.

Code of Conduct

The Code of Conduct is designed to regulate the activities of Members between themselves and members of the public; themselves and other Members; and themselves and agents or principals or other persons who are not members of the Association. The aims of the Code of Conduct are: to ensure that the public receive the best possible service from Members; to maintain and enhance the reputation, standing, and good name of the Association and its membership; and to encourage initiative and enterprise in the belief that properly regulated competitive trading by and between Members will best serve the public interest and the wellbeing of the travel industry.

Licensable business

Licensable business is that which is covered under an ATOL.

Memorandum and Articles of Association

The constitution of ABTA is laid down in two basic documents, the Memorandum of Association and the Articles of Association. The Memorandum sets out the objectives and powers of the Association, while the Articles lay down the constitution and functions of the Board of Directors, the rules of membership and so on.

Non-licensable business

Non-licensable business is all principal business not covered by an ATOL.

Non-licensable shortfall insurance

Because Members with non-licensable activities as a principal are bonded by us at the lowest rate permitted by the EC Directive on Package Travel (The Package Travel, Package Holidays and Package Tour Regulations 1992-SI 3288/1992), we are required to have in place a back-up fund. This is provided by way of a shortfall insurance policy.

Principal business

Principal business is business transacted in the capacity of a tour operator, i.e. a person carrying on business in whole or in part as a principal to a contract with a consumer, either directly or through an agent or agents in respect of the sale or offer for sale of travel arrangements, or who holds an ATOL to sell or offer for sale, in any capacity, travel arrangements to the general public. This can include packaging travel arrangements as agent under two or more contracts. Principal business is either ‘licensable’ or ‘non-licensable’.

Rail Settlement Plan

For details please contact ATOC.

Retail business

Retail business is business transacted in the capacity of a travel agent, i.e. a person carrying on business, in whole or in part, as agent for a principal, remunerated by commission or otherwise, in respect of the sale or offer for sale of travel arrangements. Retail businesses are not in contract with the client.

Tour operator

See Principal business

Travel agent

See Retail business

Travel Agents’ Bond Replacement Scheme (TABRS)

ABTA’s own captive insurance company in Guernsey provides this highly competitive scheme, currently used by 30% of ABTA travel agents as an alternative to bonding. Full entry into the scheme is only available to Members who have been in membership for three full years; some other restrictions also apply. However, all Members conducting retail activity are required to make some contribution into the scheme.

Travel arrangements

Travel arrangements are defined as transport, accommodation, tourist or business services and facilities, travel insurance, holidays, packages as defined in the EC Directive on Package Travel (The Package Travel, Package Holidays and Package Tour Regulations 1992-SI 3288/1992) or otherwise and any other arrangements designated as travel arrangements by ABTA’s Board of Directors from time to time.

Turnover

The gross amount paid by the customer, i.e. gross invoice value.

Turnover statement

An annual or quarterly statement of turnover.