ABTA MEMBERSHIP
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ABTA MEMBERSHIP
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Thank you for your interest in membership of the Association of British Travel Agents. Currently over 6,800 travel agent and tour operator offices have chosen to be ABTA Members. Being part of the largest travel trade organisation in the UK sends strong signals to your customers, telling them that your business is committed to high standards and practices, and that their money is protected. It also tells other industry suppliers about the strength of your business. ABTA membership also gives you access to a wide range of ABTA services. Please note that if you are not engaged in retail business transacted in the capacity of a travel agent and/or principal business transacted in the capacity of a tour operator, you may wish to seek membership of our business-to-business scheme, the Travel Industry Partner scheme. Below there are a number of the most frequently-asked questions about membership of ABTA, together with their answers. A glossary is available to explain some of the terms used. Please CLICK HERE to view. If you cannot find the information you are looking for, please go to Who to Contact. Memorandum & Articles of Association Code of Conduct Frequently Asked Questions What kinds of businesses can join ABTA? Membership of ABTA is open to companies or firms selling in the British Isles or Republic of Ireland that are engaged in retail business (i.e. acting as a travel agent) and/or engaged in principal business (i.e. acting as a tour operator), and that meet ABTAs membership requirements. Must my company be incorporated in the British Isles? No, but accounts of overseas companies or firms must comply, as far as possible, with the United Kingdom Companies Acts and must be presented in English. My business has both retail activity and activity as a principal. Do I need to make two separate applications to join? ABTA has one class of membership and you only need make one application to join the Association. Our membership requirements, however, recognise the difference between the two activities, and you will need to provide information about both activities in your application. On being granted membership, you will be allocated two ABTA numbers one for your retail activity and one for your activity as a principal. My business is acting as a principal. If I have an ATOL, do I also need to join ABTA? An ATOL will only cover the sale of travel arrangements that include air transportation (that is, your licensable business). If you are acting as a principal and offering travel arrangements that do not include air transportation (non-licensable business), you are still required by law to protect your clients money. My business fits ABTAs definition of a retailer, but I do not have a shop. Can I still join ABTA? Yes. The important thing is not how you distribute your services, but what those services are. Whether your business is a call centre, internet-based, or a traditional high-street shop or office, provided you meet our criteria you can join ABTA. I will be conducting my business from my home. Is this acceptable to ABTA? Yes, but you will need to submit with your application evidence of planning permission to use your home for this purpose. I am in the process of setting up my business. Can I join ABTA now? You can apply to join ABTA now, but membership cannot be granted until your business has commenced trading. Do I have to join ABTA? Membership of ABTA is not compulsory, but there are distinct advantages to companies choosing to join the Association. Membership of ABTA sends a strong signal to your customers: it tells them that your business is committed to certain standards and practices, and that their money is protected. Membership of ABTA also sends a strong signal to other industry suppliers. Other advantages include recognition within the industry and a wide range of Member services and other benefits. What are ABTAs membership requirements? Businesses applying to join ABTA must meet the Associations membership requirements. There are four main requirements, which are designed to ensure that Members are financially stable and operate to high professional standards. The requirements are as follows: financial requirements; bonding requirements; staffing requirements; and a requirement to adhere to ABTAs Memorandum and Articles of Association and Code of Conduct. Why do ABTAs membership requirements appear to be so strict? A central part of ABTAs role is to reassure the public that their money is safe with ABTAs Members. In order to do this, we need to safeguard the Associations assets and maintain the highest professional standards. With a few exceptions, nothing that we require of our Members goes beyond normal good practice for an efficient and profitable business. What are the financial requirements for ABTA membership? All applicants must demonstrate minimum paid-up share capital or proprietors/partners capital of at least £50,000. There must also be net assets of at least £50,000 excluding intangibles. Retail Members must have at least £15,000 working capital (i.e. net recoverable current assets). Principal Members whose non-licensable turnover represents more than 30% of their total turnover or is in excess of £500,000 must have working capital equal to at least 4% of their total turnover as a principal. For Members with both retail and non-licensable principal business, the working capital requirement is £15,000 or 4% of total turnover, whichever is the greater. Current assets pledged as security for bonds or otherwise will be disallowed when arriving at the working capital position, as will overdrawn directors loan accounts, debtor balances falling due after one year and amounts due from connected undertakings which have not arisen in the course of arms-length trading. You will also need to provide us with a bond. If you need any assistance or further explanation of these matters, please contact us. Contact details can be found in Further Questions at the end of this document. Is a share premium account classed as share capital? Yes. If shares are issued at a premium, the resulting share premium account will be treated as share capital for our purposes. Are redeemable shares acceptable? Yes, but you will be required to give an undertaking not to redeem any shares without giving 12 months prior notice and receiving the Associations written consent. Are loans from directors or parent companies acceptable in lieu of share capital? No. Loans are always treated as liabilities and not as additions to capital and reserves. How do I demonstrate that my business meets your financial requirements? You will need to submit information about your business as part of your application to join the Association. This will include recently-audited accounts or an opening balance sheet as at the commencement of trade. Projections showing the anticipated position at the end of the current years trading are also required. Details are contained in the Membership Pack. Once you have been admitted to membership, you must supply management accounts made up to a date not later than six months after admission, to be submitted within 30 days after that date (if a retail business) and 60 days after that date (if a principal business). What information will I have to supply once I have joined ABTA? You will be required to submit audited accounts annually, within six months of your year end, in accordance with the Accounts Rules. You will also be required to supply quarterly turnover statements. On admission to membership, you will be allocated a Financial Liaison Officer who is available to help you with any queries. We also supply forms to help you or your accountant with this reporting. These can be found on our website at www.abtamembers.org/accforms/index.htm
Why do I need to bond my business? If you are acting as a principal, you are required by law (the EC Directive on Package Travel (The Package Travel, Package Holidays and Package Tour Regulations 1992-SI 3288/1992)) to have in place financial protection for your customers. All your licensable activity must be bonded with the Civil Aviation Authority (CAA). For ABTA membership, a bond must be provided in favour of ABTA for all non-licensable activity. If you are acting as a retailer, it is a condition of ABTA membership that you protect your clients money. It is this scheme of financial protection that gives consumers the confidence to book with an ABTA Member. What are ABTAs bonding requirements for businesses with retail activity? A bond must be provided in favour of ABTA. Bonding rates are set by the Association and are subject to review. Currently, a new Member conducting retail business will be required to provide a bond in respect of that business at the following rates on the annual rate of Applicable Risk Turnover (ART).
The rates are cumulative. Thus a Member with an Applicable Risk Turnover of £2,500,000 and no deficit would be bonded as follows:
What are ABTAs bonding requirements for applicants with principal activity? All your licensable activity must be bonded with the Civil Aviation Authority (CAA). For ABTA membership, a bond must be provided in favour of ABTA for all non-licensable activity. This is normally for 15% of gross turnover, with a minimum of £20,000, although higher bonding levels will apply if turnover is concentrated in a single quarter of the year or if there is a pattern of abnormally early collection of deposit/balance payment. The turnover on which the bond is based is the projected gross turnover for the current year or the audited turnover for the preceding year, if greater. If breakage deposits are charged, these must be bonded at 50% of the total collected. We will tell you what bond we require once you have provided us with the necessary turnover and other information. If I have a bond with the CAA and a bond with ABTA, does this mean double the paperwork? Not necessarily. Wherever possible ABTA and the CAA share documents and procedures, which means that you do not need to duplicate your paperwork. How do I know what level of bond to provide? In order to establish the exact bonding required, all applicants conducting non-licensable activities are required to supply a completed form of application for authorisation of non-licensable activities with monthly breakdown of projected turnover. The appropriate form will be sent on receipt of your application, if non-licensable turnover is indicated. If you are conducting retail activities, your bond will be calculated by us according to the amount of your relevant turnover. Do I need to obtain my bond before I apply to join ABTA? No, applicants are not required to provide a bond until they have been notified that their application has been approved. Does it matter where I get my bond from? Yes. ABTA will only accept bonds from authorised providers (bond obligors). Can you provide me with a list of companies that provide bonds? You can find a list of companies from which ABTA will accept bonds by clicking here. How much will I have to pay for a bond? This is a matter between you and the bond obligor. The amount you pay will depend on the financial stability of your company and on the way the bond obligor structures their offer. It is likely to take the form of a set fee or a percentage of the total value of the bond. Do I have to obtain a bond, or can I provide ABTA with some other form of financial protection? We require all new ABTA Members to provide us with a bond, and cannot accept any other form of financial protection. Established Members with retail activity have access to the Travel Agents Bond Replacement Scheme (TABRS), which is an alternative to bonding. Full entry into the scheme is only available to Members who have been in membership for three full years. However, all retail Members are required to make a partial entry to the scheme. The current rates of contributions are £200 for each Head Office (plus 5% Insurance Premium Tax), plus £17.50 for each additional branch (plus 5% Insurance Premium Tax). Members conducting non-licensable principal business must contribute to the premium for the Associations non-licensable shortfall insurance policy. The minimum contribution (2004) for new Members is £450 (plus 5% Insurance Premium Tax). We may, on rare occasions, ask you to provide other forms of security in addition to or instead of a bond. What are ABTAs staffing requirements? If you are engaged in retail activity, you need at least one qualified member of staff at each office. If you are engaged solely in activity as a principal, this requirement does not apply. If your business is selling or advising on the sale of travel insurance, there are additional staffing requirements. What is ABTAs definition of qualified? To be considered as qualified, the person concerned must within five years prior to any point of time during their employment have had:
You will need to submit copies of your staff qualification certificates with your application to join the Association. And what is ABTAs definition of relevant practical experience? Experience will not be considered relevant unless it has been of a nature that the average travel agent would expect to acquire in the course of running a non-specialist travel agency, that is, the full range of foreign package tours. How can I find out more about COTAC and ABTAC? It is no longer possible to take the COTAC examinations as these were superseded by ABTAC on 1 January 1995. You can find further information on the TTC Training website, at www.ttctraining.co.uk/abtac.html My business sells travel insurance. What staffing requirements are there for this activity? With effect from 30 September 2005, every employee selling or giving advice about travel insurance must be qualified to Level One of the ABTA and City & Guilds travel insurance training programme, and at least one employee in each office selling travel insurance must be qualified to Level 2. For information about this qualification, visit www.ttctraining.co.uk/abtatitp.html I am the owner of the business. Do I need to have any travel qualifications or experience? No. Provided your business meets our staffing requirements, you do not have to have travel qualifications or experience yourself.
What are the costs of membership? Businesses applying to join the Association must pay a one-off registration fee and, on joining, an entrance fee. Annual subscriptions are payable to ABTA on joining and thereafter on 1 July each year. Subscriptions are based on turnover. Currently, the basic annual subscription is £540. In addition to your annual membership subscription, you will need to provide us with a bond or other acceptable form of financial protection. Once you are in membership, you will also be required to contribute to the Travel Agents Bond Replacement Scheme (TABRS) if you are conducting business as a retailer, and to the non-licensable shortfall insurance premium if you are conducting non-licensable principal business. Details of fees and subscriptions are below. How much is the registration fee? The registration fee is £387.75 (£330 plus VAT). This must be submitted with your application form and is non-refundable. The entrance fee is £1,175.00 (£1,000 plus VAT), with effect from 1 July 2005 the entrance fee will be £1,410.00 (£1,200 plus VAT). This is payable once an offer of membership has been made and is a one-off payment. The annual subscription is payable once an offer of membership has been made. The amount is dependent on your business activity, as follows:
Plus
Is VAT payable on subscriptions and fees? All fees are subject to VAT at 17.5%, except for companies in the Channel Islands, the Irish Republic, and overseas. Do I have to pay the full annual subscription if I join the Association part of the way through the membership year? The membership year begins on 1 July. Where admission to membership takes place between 1 July and 31 December, a full years subscription is payable. When admission to membership takes place between 1 January and 30 June, half a years subscription is payable. How do I pay my annual subscription? You must pay by direct debit. A direct debit authority form is included in the Membership Pack. You will need to submit this with your application. Can I pay my annual subscription in instalments? No. Payment is due in full on 1 July each year. ApplicationsI would like to apply to join ABTA. What do I need to do? You can request a Membership Pack from Nashita Luchmun () on 020 7307 1935. I am in the process of completing my application to join ABTA, and have some queries. What should I do? You will find many of the answers to your questions in the Membership Information booklet that was sent to you as part of your Membership Pack. If you still have questions after consulting this booklet, please contact Nashita Luchmun, as above. How long will it take for my application to be processed? Your application will be acknowledged on receipt and you will be informed of the outcome in due course. It normally takes six to eight weeks to process applications from the date we receive them. Please note that incomplete information will delay the processing of your application. If you have any further questions about ABTA membership, please contact Nashita Luchmun () on 020 7307 1935.
Last updated: 30 March 2006
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© Association of British Travel Agents
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