The financial criteria looks at a range of financial ratios. The extent of the financial assessment depends on the
size or type of licence held or applied for, reflecting the level of risk posed to consumers and the ATT. Businesses
must provide figures from their latest financial statements, which are used to calculate a number of ratios. The table
below shows the ratios that are applied to ATOL holders and a more detailed explanation is provided in our policy note on financial criteria.
Those ATOL holders with an ATOL limit in excess of £20m are subject to a more in-depth risk based approach as well
as monthly monitoring. Please note that we also reserve the right to undertake a more in-depth analysis on those ATOL
holders licensed for less than £20m where we consider there is a higher likelihood of failure or greater detriment to
In advance of an application to renew or vary an ATOL and to obtain an indication of whether their business’
financial statements will meet the new criteria, ATOL holders may conduct a self-assessment of their finances against
the new criteria by submitting their figures to our ATOL Self-Assessment Tool (ASAT).
If you wish to do so, you will need to use a specific form. There are separate forms and guidance notes for SBA and
Please ensure that you read the accompanying guidance with the ASAT form to ensure that the correct information is
provided. Please note that we are unable to process multiple requests and that the most recent submission will be
selected for processing where this has occurred.
Standard ASAT Form
Standard ASAT Guidance
SBA ASAT Form
Once you have submitted the ASAT form, you should receive a response within five working days confirming whether
your business, based on the figures that you provided, has met the criteria. Where the result indicates that the
criteria has not been met, you will be informed of the likely cash injection required in order to meet the
This can therefore provide you with an indication of any likely requirements for the next renewal of your licence.
However, the result provided by the ATOL Self-Assessment Tool will be automatically generated based solely on the
figures you provide. Please note that these figures will not be checked or verified by us and are meant to be
indicative only. In order to obtain an accurate result, as part of your renewal, you will be required to submit your
figures on the Accountants’ Annual Report, confirmed by an ATOL Reporting Accountant.
If you are unclear about the result, you may request a telephone appointment to discuss it in more detail by
e-mailing email@example.com, using the subject
New applicants for ATOLs wishing to assess their finances against the new criteria should request the ATOL
self-assessment form by e-mailing firstname.lastname@example.org, using the subject “New Applicant”.
In 2014, the CAA consulted on proposals to rebalance the regulatory approach under ATOL and to extend a risk-based approach to all ATOL holders. Part of this was establishing a more appropriate and effective financial assessment for the different ATOL categories.
The CAA engaged an external professional services firm with extensive experience within the travel industry and a leading international credit rating agency to conduct this work. Based on their analysis they developed a new financial assessment for SBAs and standard ATOLs with licensable revenue under £20million. The financial assessment looks at a range of financial ratios to measure the strength of a business' financial resilience. These assessments reflect industry best practice in risk assessment and are designed to be supportive of businesses growing through the layers.
Analysis conducted in 2014 indicated that consumers booking with SBAs are almost 3 times more likely to be affected by a failure than if they had booked with a standard ATOL and that arrangements made with regard to SBAs were not providing sufficient protection for the ATT. In its 2014 Rebalancing ATOL consultation, the CAA proposed withdrawing the SBA scheme but following consideration of the industry responses, it published its decision in 2015 to retain the SBA but to alter eligibility, which includes the requirement to meet a financial assessment.
The new financial assessment was introduced on 1 June 2016. Existing ATOL holders will be expected to meet the new criteria at the renewal of their licence that is due to expire in either September 2016 or March 2017. The only exception to this is where an ATOL holder applies to vary their licence significantly before their renewal, which may require the financial assessment to be undertaken.
The new assessment is more sophisticated than the free asset test. The extent of the financial assessment depends on the size and type of licence held or applied for, which reflects the level of risk posed to consumers. Businesses must provide figures from their latest financial statements, which are used to calculate a number of ratios, as outlined in our policy on financial criteria. These ratios will then provide the CAA with a score, which determines whether the business meets the financial criteria.
The ratios are outlined in our policy on financial criteria and are assessed using figures from your financial statements. The explanation of the ratios in the policy note provides ATOL holders with an indication of how the ratios may be viewed positively by the assessment.
All businesses applying for a new ATOL are required to have a minimum level of PUC of £30,000. However, existing ATOL holders with an SBA on 31 May 2016 will not normally be required to meet this requirement as long as they continue to hold an SBA.
Full details of the financial statements required for ATOL holders are included within the policy on financial criteria.
The figures from your financial statements need to be submitted on the Annual Accountants' Report, which must be signed off by an ATOL Reporting Accountant. The Annual Accountants' Report is published in Official Record Series 3.
In order for subordinated loans currently in place to be treated favourably in the assessment, you should ensure that they are properly recorded and declared in your financial statements under long term loans. They should also be confirmed in the relevant section of the ASAT form or the Annual Accountants' Report.
As published in the CAA's decision in March 2015, Small Business ATOLs are subject to a limit of 500 passengers and £1million revenue per year. SBAs must ensure that at any one time, the number of passengers booked to travel with them does not exceed 500 passengers and the revenue in respect of those passengers does not exceed £1m, irrespective of whether the bookings are in the current ATOL period or beyond.
Standalone Trade ATOLs are subject to the financial assessment in the same way as other standard ATOL holders.
Franchise member ATOL holders with an ATOL limit of more than 1,000 passengers are subject to the financial assessment and required to provide financial statements in line with our policy on financial criteria.
Those franchise member ATOL holders with an ATOL limit of 1,000 or less are not usually be subject to any financial assessment by the CAA and are not therefore required to provide their financial statements to the CAA. However, the franchisee may conduct their own assessment, which members may be required to meet.
In advance of an application to renew or vary an ATOL, ATOL holders may conduct a self-assessment of their finances against the new criteria by submitting their figures to our ATOL Self-Assessment Tool.
New applications received from 1 June 2016 are subject to the new criteria.
Existing businesses applying for a new ATOL will be assessed using figures from their latest financial statements. For start-up businesses, the assessment will be based on their projected financial statements, although these will be calibrated and sensitised to ensure that they are reasonable for the business. A minimum paid-up share capital of £30,000 will be required although a further cash improvement may be necessary.
Details of the financial information required from new applicants are listed in the new applicant application form.
In advance of an application to renew or vary an ATOL, ATOL holders may conduct a self-assessment of their finances against the new criteria by submitting their figures via our ATOL Self-Assessment Tool (ASAT) if they wish.
Once you have submitted the ASAT form, you should receive an e-mail within five working days confirming whether your business, based on the figures provided, has met the criteria or whether a financial improvement is required.
If the ASAT result indicates that your business does not meet the financial criteria, you will be informed of the likely requirement in order to do so, which is normally the injection of cash. If you are concerned about your result, please request a telephone appointment to discuss your results by e-mailing email@example.com, using the subject “Results discussion”. However, please note that we will be unable to confirm exact requirements until we receive your Accountant's Annual Report signed by an ATOL Reporting Accountant, as part of the renewal.
We aim to provide a reply to your ASAT submission within 5 working days. If you are concerned, please e-mail firstname.lastname@example.org, using the subject “ASAT Follow-up”.
Your financial statements will normally be assessed as part of the renewal of your licence in either March or September. ATOL holders are invited to renew their licences a few months in advance of this and are encouraged to submit their application and financial statements as soon as possible after this to enable the assessment to be conducted and requirements to be met.
Once we have received the Annual Accountant's Report and your finances have been assessed, you will receive confirmation from the CAA of whether or not your business meets the criteria.
If your business does not meet the financial criteria, you will be informed of the requirement in order to do so, which is normally through an injection of cash. The CAA will discuss this requirement with you and will be sensitive to those who may have difficulty in initially meeting the new criteria.
On 1 June 2016, the minimum bond for new applicants increased to £50,000 reducing over four years, i.e £50,000, £40,000, £30,000, and £20,000. However, the new levels do not apply to existing ATOL holders who are in their first four years of holding a licence, unless they fall within the exceptions outlined in our published bonding policy.
The ATOL Standard Terms require Accountants to complete reports on the ATOL holder's business. It is important that the CAA can rely on these reports therefore the ATOL Reporting Accountant Scheme was introduced to improve standards of reporting. The scheme provides the CAA with greater assurance in the reporting through improving accountants' understanding of the industry and the ATOL requirements. Accounting firms or individuals designated by CAA approved professional accounting bodies are called 'ATOL Reporting Accountants (ARAs)'.
The Annual Accountants' Report must be signed by an ATOL Reporting Account.
From 1 April 2016, the Annual Accountants' Report must be signed by an ATOL Reporting Accountant. The CAA will not accept reports signed off by other accountants.
A list of ARAs is published on our website.
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