Proposals to force accountants to sit an exam before allowing them to deal with travel companies could drive up costs and cut competition, agents have claimed.

In addition to the proposed abolition of the Small Business Atol, the CAA’s Rebalancing Atol consultation, which closed on Monday, also featured plans for accountants to have to qualify as licensed practitioners before being allowed to oversee travel accounts.

The CAA has defended the proposed course, estimated to cost accountants £600, claiming it was necessary amid the increasingly complicated nature of the industry. However, agents told TTG they were concerned.

Moseley Travel owner Charles Eftichiou said: “That’s just giving more people a licence to print more money by charging for what will then be seen to be a specialist service.

“There’s no excuse for becoming more bureaucratic, in fact they [the CAA] should be less. They should simplify the paperwork.

“Everyone’s got a local accountant. How many are going to learn from the CAA how to do Atol for the small amount of money they make?”

Peter Goord Travel owner Antony Goord agreed most locally based accountants would be unwilling to invest the time and money into preparing for the exam if they have just one or two agents on their books.

He added: “If we had to look for a new accountant it would be a very bad move.” Instead Goord said the proposals would simply push up costs with accountants who do sit the exams, and place additional constraints on agents’ margins.

‘A big issue for a small business’

John de Vial, Abta’s head of financial protection, agreed: “Many of the 1,200 members we have are generally very small businesses.

“A lot of members have had feedback from their accountants that if the CAA goes ahead with a licensing system for accountants and additional licensing requirements… there’s a real risk that a lot of small accountants and auditors would simply drop out of doing Atol work.”

He added: “The sheer cost and disruption of having to move to probably not a local firm is quite a big issue for a small business.”

CAA head of crisis management (Atol) David Clover insisted the move would bring the travel sector into line with other industries, where accountants are required to prove they have specialist knowledge.

He added: “We want to be more sophisticated about the way in which things are achieved.

“There are a range of factors where different things apply in terms of who is principal, and who is agent, what payments are being made in respect of different channels or if they’re being shown as flight only.”

However, Clover admitted that introducing new qualification requirements could lead to some accountants choosing to let go of their travel clients.

“If they’re not interested in what’s needed for an Atol, they don’t want to work with them [the agents] anyway,” he added.

Abta’s own response to the consultation urged the CAA to wait until regulators in Europe have finalised a new Package Travel Directive, by summer 2015.

Elsewhere, the association said it broadly supported many of the proposed changes outlined in the Rebalancing Atol consultation.