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There are an increasing number of Standard ATOL Trust deeds that the CAA are using to create the trust account structures that they will allow UK travel companies operate within under the terms of their ATOL. They have some key similarities and some key differences:-
Key differences
Some ATOL trust deeds require that all licensable funds settle directly into the trust account whilst some allow funds to settle into an ‘interim account’ and then be transferred (usually within 2 days) into the trust account.
The CAA’s standard escrow deeds work by aiming to ringfence in a trust account, a set percentage of all customer money paid for flight inclusive sales.
Releases or deposits of funds are then made to adjust the balance in trust so that it matches the appropriate percentage (the ‘Agreed Protected Funds’) at the end of each week.
In contrast, the CAA’s full trust accounts require that all customer money is held in a trust account and will be released based on a set of data prepared to booking level where elements of funds paid on each booking are released based on certain detailed criteria.
Key similarities
All standard ATOL trust deeds require that the bank holding the trust account give a specifically worded undertaking to the Air Travel Trustees and to the trustees operating the account. This is to provide the parties with reassurance that the bank will not mix or charge the funds; and that they will be preserved in line with the trust deed in place.
Similarly, all standard ATOL trust deeds require that the trust account have a mixture of signatories mandated to it: from both the ATOL holder and the trustee. Ultimate control over the account will always pass to the Air Travel Trustees in the event of the ATOL holder’s failure.
Pursuant to every standard ATOL trust deed, ATOL holders are required to submit ‘payment requests’ (on a prescribed form) detailing the amount of money claimed from the trust account and the account to which payment should be made. The timing for release of ‘payment requests’ follows a set pattern, with requests generally having to be made prior to 11am for release by the bank after 3pm.
There may be nuances particular to your business or your agreement with the CAA which mean that the CAA’s standard trust deed terms may not apply or may be varied. If that’s the case, do contact us for further information.
Serenity Travel Trusts
Suite 2, Realtex House
Leeds Road
Rawdon
Leeds
LS19 6AX
