Airlines

‘Disastrous’: UK air passenger tax to rise above inflation, prompting industry backlash

UK air passenger tax to rise above inflation
Business leaders have criticised the chancellor for hiking APD on premium cabin customers (@photogoodwin/Adobe Stock)

In the UK government’s Spring Budget last week, chancellor Jeremy Hunt announced a further increase in air passenger duty, prompting criticism from industry leaders.

Air passenger duty (APD) is a tax that passengers aged 16 and over will have to pay when they fly from most UK airports.

It will rise from 1 April and will affect those travelling in business and first class.

The tax is separated into four bands, one domestic and three international, which are determined by the distance between London and the capital of the plane’s destination.

The Domestic band applies to flights to destinations within England, Scotland, Wales and Northern Ireland from another part of the UK.

For international flights, Band A is for distances between 0 and 2,000 miles, Band B is for distances between 2,001 miles and 5,500 miles, and Band C is for distances over 5,500 miles.

In theory, airlines pay APD to HMRC (His Majesty’s Revenue & Customs), but in practice airlines pass these costs onto consumers, meaning that passengers will see fare hikes for air travel.

Current rates

• Domestic: reduced rate £6.50, standard rate £13, higher rate £78
• Band A: reduced rate £13, standard rate £26, higher rate £78
• Band B: reduced rate £87, standard rate £191, higher rate £574
• Band C: reduced rate £91, standard rate £200, higher rate £601

New rates 

• Domestic: reduced rate £7, standard rate £14, higher rate £78
• Band A: reduced rate £13, standard rate £26, higher rate £78
• Band B: reduced rate £88, standard rate £194, higher rate £581
• Band C: reduced rate £92, standard rate £202, higher rate £607

But industry leaders have criticised the chancellor for hiking the tax on premium cabin customers.

Karen Dee, chief executive of the Airport Operators Association (AOA), said: “It is disappointing to see the chancellor increase air passenger duty for business travellers, especially when data show this group is still to recover to 2019 levels.

“Business travellers are responsible for increasing foreign investment in the UK, for opening new markets for our goods and services, and creating jobs across the country.”

Clive Wratten, chief executive of the Business Travel Association, added that the policy is “disastrous for the economic welfare and wellbeing of British businesses and their employees.”

“Contrary to common misconceptions, business travel is not just for the wealthy,” he continued.

“This tax will hinder growth for small and medium enterprises through limiting international collaboration opportunities …

“There is no mechanism for ensuring that the monies from this tax will go into innovation in the airline sector nor into sustainable aviation fuel.

“This is therefore just another tax on British businesses.”

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