The ATOL Protection Contribution has been reclassified as a tax, leading to fears that the money raised from the £2.50 per passenger charge will be swallowed by the Treasury.
Kae Jennings, the government’s head of aviation policy, told the Barclay’s Travel Forum that "for the time moment" the Air Travel Trust Fund will continue to manage the cash.
She said the role of the trustees would remain unchanged, adding: "The money will not go to the Tresury. The trustees will continue to manage the fund."
Jennings said the reclassification followed an ONS review of all fees, charges and licences and they came to conclusion that, under the European definition, the Contribution was a tax.
Howewer, travel accountant Chris Photi of White Hart Associates warned this could lead to the money being diverted elsewhere. "When you classify something as a tax, the government have an amazing way of putting it into something else."
