29 Oct

Air Passenger Duty – a tax rise too far

From this Sunday 1 November 2009 Air Passenger Duty rises so that a family of four flying to the USA will pay £180 in tax and £240 from November 2010 when the aviation poll tax is set to rise again. The UK Government is one of only two governments to tax air passengers in this way and these rises will hit families particularly hard as they struggle with the impact of the recession.

Other destinations popular with families will be even harder hit with  Caribbean destinations seeing the same family of four having their bill increase to £200 from this Sunday and £300 a year later. The Caribbean is disproportionately affected with tax rates higher than flights to the USA, highlighting the illogicality of the tax which is meant to be based on the distance travelled.

For those paying out for a little extra leg room in premium economy these tax increases will be double, taking this service, introduced to allow a bit more comfort at an affordable price, out of the range of many travellers. Airlines may consider removing the service altogether if the Government insists on taxing it as highly as business and first class tickets.

Inbound tourism will also be damaged as foreign visitors are put off from travelling to the UK. Regional airports will suffer as airlines consider the profitability of maintaining routes with an increased tax burden at a time of declining passenger numbers.

These steep APD rises will have a disproportionate effect on some of the poorest countries in the world whose economies are heavily reliant on tourism as long haul travel bears the most savage increases.

Mark Tanzer ABTA Chief Executive said “These APD rises will put pressure on jobs and damage local economies reliant on tourist expenditure both here and abroad when we are already suffering from the impact of the recession. They will place an even greater financial burden on families and others on tight budgets as they book their holidays or visits to friends and family. They will undo a lot of the good work being done by the industry to keep prices at an affordable level.”

Air Passenger Duty increases from 1/11/09 and 1/11/10

Four geographical bands will come into effect based on the distance from London to the capital city of the country concerned (with the exception of the Russian Federation which is split east and west of the Urals):

Band and approximate distance in miles from London Reduced rate Standard rate                                                                 

  Current Nov 2009       Nov 2010        Current  Nov 2009      Nov 2010
Band A (0-2000)   £10                                              £11 £12 £20                          £22 £24
Band B (2001-4000) £40 £45 £60 £80 £90 £120
Band C (4001-6000) £40 £50 £75                 £80            £100            £150
Band D (over 6000) £40              £55               £85                 £80            £110            £170