FREQUENTLY ASKED QUESTIONS
Here are some of the most frequently-asked questions about membership of ABTA, together with their answers. Please use our glossary if you need help with the terms we use.
Eligibility
Membership Requirements
Financial Requirements
Bonding Requirements
Membership Costs
Applications
Who to Contact
Eligibility
What kinds of businesses can join ABTA?
Membership of ABTA is open to companies or firms selling travel arrangements in the British Isles or Republic of Ireland that are engaged in retail business (e.g. acting as a travel agent) and/or engaged in principal business (e.g. acting as a tour operator), and that meet ABTA’s 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 agent 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 us. Our membership requirements, however, recognise the difference between the two activities, and you'll need to provide information about both activities in your application. On being granted membership, you'll be allocated two ABTA numbers – one for your retail activity and one for your activity as a principal.
My business fits ABTA’s definition of a retailer, but I don't 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'll be conducting my business from my home. Is this acceptable to ABTA?
Yes. You’ll need to provide evidence of planning permission with your application to join.
I'm in the process of setting up my business. Can I join ABTA now?
You can apply to join ABTA now, but membership can't be granted until your business has commenced trading.
Do I have to join ABTA?
Membership of ABTA isn't compulsory, but there are distinct advantages to businesses choosing to join us. Membership of ABTA sends a strong signal to your customers: it tells them that your business is committed to certain standards and practices. 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.
Membership Requirements
What are ABTA’s membership requirements?
Businesses applying to join ABTA must meet our membership requirements. These are designed to ensure that Members are financially stable and operate to high professional standards. The requirements are set out in our Articles of Association and in our Code of Conduct. You can find more information about the Articles, the Code, and related documents, including guidance to help you understand them, on our Industry Standards page.
Why do ABTA’s membership requirements appear to be so strict?
A central part of ABTA’s role is to reassure the public they're dealing with reputable and stable businesses. We also need to safeguard ABTA’s assets, for the benefit of all Members. With a few exceptions, nothing that we require of our Members goes beyond normal good practice for an efficient and profitable business; and much of what we require will help your business to stay within the law.
Financial Requirements
What are the financial requirements for ABTA membership?
All applicants must demonstrate minimum paid-up share capital or proprietor’s/partners’ capital of at least £30,000. There must also be net assets of at least £30,000 excluding intangible fixed assets. Agent Members must have at least £15,000 working capital. Principal Members whose non-licensable turnover represents more than 30% of their total turnover or is in excess of £500,000 must have net recoverable current assets equal to at least 4% of their total turnover as a principal. For Members with both agent 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 haven’t arisen in the course of arm’s-length trading. You may also need to provide us with a bond. If you need any assistance or further explanation of these matters, please contact us.
Some Members aren’t required to comply with these financial criteria. If, for example, you don’t conduct any activity which is protected by ABTA in the event of your financial failure, you’ll usually be exempt from these requirements.
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'll be required to give an undertaking not to redeem any shares without giving 12 months’ prior notice and receiving ABTA’s 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'll need to submit information about your business as part of your application to join ABTA. This will include recent accounts or an opening balance sheet as at the commencement of trade. A projected profit and loss account to the next accounting reference date and balance sheet at that date in ABTA's form are also required. You’ll find details in our membership pack. Once you've 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 60 days after that date.
Some Members aren’t required to comply with these financial criteria. If, for example, you don’t conduct any activity which is protected by ABTA in the event of your financial failure, you’ll usually be exempt from these requirements.
What information will I have to supply once I’ve joined ABTA?
You'll be required to submit accounts annually, in accordance with the Accounts Rules. You'll also be required to supply quarterly turnover statements. On admission to membership, you'll be allocated a Financial Liaison Officer who’s available to help you with any queries. We also supply forms to help you or your accountant with this reporting. You can find these on our website, in the Resources area.
If you're required to provide us with audited accounts, then the reporting accountant must be a registered auditor. If you aren't required under the Companies Act or otherwise to be subject to an audit, then the reporting accountant must be an independent qualified accountant and the individual or the individual's firm must be a member of and hold a current practising certificate from one of these supervisory bodies:
The Institute of Chartered Accountants in England and Wales
The Institute of Chartered Accountants of Scotland
The Institute of Chartered Accountants in Ireland
The Association of Chartered Certified Accountants
The Association of Authorised Public Accountants
The Chartered Institute of Management Accountants
The Association of Accounting Technicians
The Association of International Accountants
The Institute of Chartered Secretaries and Administrators
The Institute of Financial Accountants
Do I have to supply all the information on the application form?
You may be exempt from most of ABTA's financial criteria and reports, but only if none of your activities are bonded or protected by ABTA.
Bonding Requirements
Do I need to bond my business?
If you're acting as a principal, organising package holidays, you're 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). Your non-licensable packages can be protected by way of a bond held by a trade association, e.g. ABTA, or by way of an insurance policy. Supplies that you make that aren’t packages don't have to be protected, but you can choose to do so. If you're acting as an agent, it's a condition of ABTA membership that you provide us with security. This may be a bond or TABRS.
What are ABTA’s bonding requirements for businesses with agent activity?
A bond or TABRS payment must be provided in favour of ABTA. Bonding rates are set by ABTA and are subject to review. Currently, a new Member conducting agent 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).
| Applicable Risk Turnover | Bond Required |
| £1,000,000 or less | £37,500 minimum amount |
| £1,000,001 to £2,000,000 | £37,500 plus 3% x ART excess over £1m |
| £2,000,001 to £5,000,000 | £67,500 plus 4.5% x ART excess over £2m |
| Over £5,000,000 | £202,500 plus 2.25% x ART excess over £5m |
The rates are cumulative. For example, a Member with an Applicable Risk Turnover of £2,500,000 and no deficit would be bonded as follows:
| Rate | Bond | |
| Up to £1,000,000 | £37,500 | |
| £1,000,001 to £2,000,000 | 3% | £30,000 |
| £2,000,001 to £2,500,000 | 4.5% | £22,250 |
| Total bond | £89,750 |
What are ABTA’s bonding requirements for applicants with principal activity?
All your licensable activity must be bonded with the Civil Aviation Authority (CAA). If you want to provide us with a bond for your non-licensable activity, this is normally for 15% of gross turnover for new Members, 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's 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.
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 don't need to duplicate your paperwork.
How do I know what level of bond to provide?
We’ll ask you for the relevant information and will calculate the bond or other form of security that we require.
Do I need to obtain my bond before I apply to join ABTA?
No, applicants aren't required to provide a bond until they've 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 here on our website - click on the Resources tab, go to Publications in the left-hand menu, and choose Financial Reporting & Security from the dropdown list.
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's 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 agent Members to provide us with a bond, and can't accept any other form of financial protection, although some Members with agent activity may be allowed full entry into the Travel Agents’ Bond Replacement Scheme (TABRS), which is an alternative to bonding. All agent 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). Members conducting non-licensable principal business and bonding this activity with ABTA must contribute to the premium for ABTA’s non-licensable shortfall insurance policy. The premium for this varies from year to year. We may, on rare occasions, ask you to provide other forms of security in addition to or instead of a bond.
Membership Costs
What are the costs of membership?
Businesses applying to join ABTA 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 £750 + VAT. In addition to your annual membership subscription, you may need to provide us with a bond or other acceptable form of financial protection. Once you're in membership, you'll also be required to contribute to the Travel Agents’ Bond Replacement Scheme (TABRS) if you're conducting business as an agent, and to the non-licensable shortfall insurance premium if you're conducting non-licensable principal business. Details of fees and subscriptions are below.
How much is the registration fee?
The registration fee is £330.00 plus VAT. This must be submitted with your application form and is non-refundable.
How much is the entrance fee?
The entrance fee is £1,200.00 plus VAT. This is payable once an offer of membership has been made and is a one-off payment.
And how much is the annual subscription?
The annual subscription is payable once an offer of membership has been made. The amount is dependent on your business activity, as follows:
Basic subscription: £750.00. This is for turnover of agent business up to and including £500,000 per annum, and turnover of principal business up to and including £200,000.
Plus
- £8.31 for each £100,000 or part thereof of agent business turnover in excess of £500,000, subject to (2.) below
- £2.48 for each £100,000 or part thereof of agent business turnover in respect of the following
i) Sales of rail tickets issued under an ATOC* agency appointment and accounted for under the ATOC Rail Settlement Plan. (*ATOC or its successor(s) or assignee(s).)
ii) Sales of air tickets issued under an IATA passenger agency appointment and accounted for under the IATA Billing and Settlement Plan.
iii) Sales of scheduled stage fare bus and coach tickets within the British Isles.
iv) Retail consolidator turnover – i.e. sales of air tickets direct to the public under a scheduled bonded or agency ATOL. - The calculation for principal business is based on turnover, and rates vary according to the type and value of the business you do. We can provide you with tables to help you calculate this.
Is VAT payable on subscriptions and fees?
All fees are subject to VAT, except for companies in the Channel Islands, the Irish Republic, and overseas.
Do I have to pay the full annual subscription if I join ABTA 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 year’s subscription is payable. When admission to membership takes place between 1 January and 30 June, half a year’s subscription is payable.
How do I pay my annual subscription?
You’ll be asked to pay by cheque. A direct debit authority form is included in the membership pack. You'll need to submit this with your application, as future subscriptions must be paid by direct debit.
Can I pay my annual subscription in instalments?
No. Payment is due in full on 1 July each year.
Applications
I'd like to apply to join ABTA. What do I need to do?
Contact Joanne Colman-Bown on 020 7307 1991. She can send you an application pack and answer any further questions you may have.
I'm in the process of completing my application to join ABTA, and have some queries. What should I do?
You'll find many of the answers in the membership information booklet that was sent to you as part of your application pack. If you still have questions after consulting this booklet, please contact Joanne Colman-Bown, as above.
How long will it take for my application to be processed?
Your application will be acknowledged on receipt and you'll 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.
Who to Contact
If you have any further questions about ABTA membership, please contact Joanne Colman-Bown on 020 7307 1991.
