If you hold an ATOL, you need an ATOL reporting accountant to review and sign your Annual Accountants’ Report for the Civil Aviation Authority (CAA). Ken Accounting is a licensed member of the ATOL Reporting Accountants Scheme, and we have experience of working with travel businesses. We work with ATOL holders across the UK, face to face in Uxbridge or entirely remotely.
What is the ATOL Annual Accountants’ Report?
ATOL is the financial protection scheme for holidays and flights sold by UK travel businesses, run by the CAA. To keep your licence, the CAA needs independent confirmation of what you have sold and how your business is performing. That confirmation comes from the Annual Accountants’ Report, often shortened to AAR.
The AAR has two parts:
- AAR Part 1 is the accountant’s confirmation of the licensable passengers you booked and carried, and the related revenue, on a departure date basis.
- AAR Part 2 is the accountant’s confirmation of various figures from your accounts, taken from the financial information you provide in your ATOL renewal application.
The CAA’s checklist with your renewal application sets out which AAR forms it needs from you. Some franchise ATOL holders are treated differently, so it is worth checking your own requirements early.
Licensable and non-licensable sales
A key part of the work is separating licensable sales from the rest of your business. Licensable sales are, broadly, the flights and flight-inclusive packages that need ATOL protection. Other sales, such as holidays that do not include a flight, are generally non-licensable.
Getting this split right matters. Your licensable passenger numbers and revenue feed into your licence and your ATOL Protection Contribution, so errors can cause problems with the CAA.
Who can sign the report?
Only an ATOL Reporting Accountant (ARA) can review and sign the AAR. An ARA is a qualified accountant registered with the CAA who has completed the required training and follows the standards of their professional accountancy body.
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The ARA reviews and confirms the forms electronically through the CAA’s ATOL system. When you press “send to your accountant” in the system, the forms go to your ARA’s registered email address, so it is important your ARA details are correct.
Our ATOL reporting service
Ken Accounting is a licensed member of the ATOL Reporting Accountants Scheme. We are qualified, IFA-regulated accountants with experience of travel businesses, so we understand how bookings, deposits, supplier payments and departures flow through a travel company’s records.
Our ATOL reporting service covers:
- Reviewing your booking records and the licensable passenger and revenue figures in AAR Part 1
- Checking the AAR Part 2 figures against your accounts
- Agreeing any differences with you before the report is signed
- Reviewing and confirming the forms through the ATOL system
- Explaining anything the CAA raises about the figures
Because we can also prepare your year-end accounts, many travel clients ask us to handle both. That way the same team understands your figures from the bookings through to the accounts and the AAR. If another firm prepares your accounts, we can still act as your ATOL Reporting Accountant.
We work with travel businesses anywhere in the UK. Most of the work can be done remotely, using secure file sharing and video calls, and you are always welcome at our office in Uxbridge.
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The fee for ATOL reporting depends mainly on the number of bookings, how your booking system records them, how many types of product you sell, and whether we also prepare your accounts. We agree a fixed fee before we start.
Deadlines and what we need from you
The AAR is part of your ATOL renewal. You need to submit a complete renewal application, and have your ARA confirm the AAR, by the CAA’s deadline.
The CAA advises ATOL holders to submit a complete application and AAR Part 2 in good time. That gives the CAA time to review it and for any conditions to be met before your current licence expires. AAR Part 2 is generated from the financial information in your application, so your ARA cannot review it until you have submitted the application.
We plan the work with you well in advance, so you are not rushing at the last minute. We will remind you when it is time to start gathering the information.
What we will ask for
The exact list depends on your business, but we usually need:
- Your booking records or reports from your booking system for the period
- A breakdown of licensable and non-licensable sales
- Your year-end accounts, or the trial balance if the accounts are not yet final
- Access to the renewal application in the ATOL system, once it is submitted
- Details of any changes to your business, products or suppliers during the year
We will send you a checklist at the start, so you know exactly what to prepare.
Accounting and VAT for travel businesses
Travel businesses have accounting challenges that most other small businesses do not. Customer money arrives long before the holiday is taken, supplier costs may be in several currencies, and revenue is often recognised on departure rather than on booking.
We can help with:
- Year-end accounts and corporation tax. See our limited company accounts service.
- Bookkeeping. Keeping deposits, balances and supplier payments clearly recorded, ideally in Xero.
- Payroll. For you and your staff, through our payroll service.
- VAT. Many travel businesses deal with the Tour Operators’ Margin Scheme (TOMS), which affects how VAT is worked out on travel packages. Read more on our VAT returns page.
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Keeping your bookkeeping in good order through the year makes the AAR much easier. If your booking system and your accounts tell the same story, the review is quicker and there are fewer questions to answer.
Applying for a new ATOL
If you are planning to sell flights or flight-inclusive packages for the first time, you may need to apply for your own ATOL. The CAA will look closely at your business and your finances before granting a licence.
We can help you prepare the financial information the application asks for, such as accounts, forecasts and details of how the business is funded. Once you hold an ATOL, we can act as your ATOL Reporting Accountant for your annual renewals.
We do not decide whether you need an ATOL, which is a matter for you and the CAA. We can, however, help you understand the financial side of the process and get your records ready.
If you are starting a new travel company, see also our company formation service.
Frequently asked questions
What is an ATOL Reporting Accountant?
An ATOL Reporting Accountant (ARA) is a qualified accountant registered with the CAA who can review and sign the Annual Accountants’ Report. Ken Accounting is a licensed member of the ATOL Reporting Accountants Scheme.
When is my ATOL Annual Accountants’ Report due?
It forms part of your ATOL renewal, so it must be completed by the CAA’s deadline for your renewal. We recommend starting early, because AAR Part 2 can only be reviewed after you submit your renewal application.
Can you act as our ATOL Reporting Accountant if we are not near Uxbridge?
Yes. We work with travel businesses across the UK. Most of the work can be done remotely, and you are welcome to visit our Uxbridge office if you prefer.
Can you prepare our accounts as well as the AAR?
Yes. Many travel clients ask us to prepare their year-end accounts and corporation tax return as well as the AAR. If another firm prepares your accounts, we can still act as your ARA.
Can you help with VAT on travel packages?
Travel businesses often need to consider the Tour Operators’ Margin Scheme. Talk to us about your situation during your free consultation.