When is a ringfencing audit required?
The Civil Aviation Authority's ring-fencing procedures are aimed particularly at group structures. For example, where the ATOL holder cannot satisfy the CAA's financial criteria at the wider group level, it can request to be assessed on an individual or sub-group "ring-fenced" basis. The CAA then wants assurance that the ATOL business is financially independent from the rest of the group.
The scope of the auditor
Our ATOL ring-fencing review provides independent assurance that the ATOL holder operates on a financially independent and ring-fenced basis from other group companies. The procedures include reviewing the holder's financial and banking arrangements to confirm that it does not provide inappropriate guarantees or loans to group entities, that bank accounts are maintained in its own name, that cash is not subject to central group management, that inter-company balances are settled on appropriate commercial terms and within the required timeframe, and that the ATOL holder maintains its own merchant agreement with its card provider.
The review is designed to give the CAA assurance that funds and financial resources supporting the ATOL business remain appropriately separated and protected within the group structure.
Our Services
If your business requires a ringfencing audit, or you're unclear about your reporting obligations, contact us at iqbal@abacusllp.co.uk or call 020 7538 5042.
This service is closely related to our work with Travel & ATOL businesses more broadly.