Despite strong calls for reform from industry and passengers, the Government today revealed that it will not make any structural changes to Air Passenger Duty (APD) following a lengthy consultation process. The announcement follows last week’s Autumn Statement, which revealed an eye-watering double inflation increase in APD from April 2012.
ABTA has been calling for the Government to freeze the increase in APD; change the banding structure to two bands to make it fairer; and reduce the amount of tax paid on premium economy seats to ensure they are not classed in the same way as business and first. ABTA has also been campaigning for short haul flights from Northern Ireland to be exempt from the tax, given the shared land border with the Republic of Ireland. The Government has already announced that long haul flights from Northern Ireland will be subject to reduced rates of APD and the revenues saved by this will be offset by the inclusion of business jets.
“The Government has rejected all common sense recommendations from industry to reform this tax and gone ahead with a double inflation increase,” said Mark Tanzer, CEO ABTA. “To completely ignore all recommendations after a lengthy consultation is extremely disappointing. The Government has missed an opportunity to make this tax fairer and instead has increased the burden on British businesses, passengers and popular destinations, such as the Caribbean that are caught by unfair banding. If the Chancellor believes that tourism is critical to boosting growth in the UK economy, he needs to give the industry a break and reconsider these decisions.”
The Government also stated that it will not offset revenues raised through the Emissions Trading Scheme (ETS) against APD, meaning that passengers will be taxed twice when they fly from January 2012.
Under the current banding structure, countries are banded based on where their capital city is located. This has given rise to many unacceptable tax burdens on destinations such as the Caribbean where holidaymakers pay more tax than they would to fly to Hawaii.
ABTA will meet with other industry groups as part of the Fair Tax on Flying Campaign to refocus its efforts on calling for a fairer tax regime.
The ‘Fair Tax on Flying’ campaign, is backed by an alliance of over 30 companies ranging from airlines, tour operators, destinations and travel trade associations, calls on the Government to make UK aviation tax fairer. For more information visit: http://www.facebook.com/afairtaxonflying