Updates

    1 April 2016

    Air Passenger Duty (APD) was introduced in 1994 with a £5 rate for the UK/EU and £10 elsewhere.

    Since then, it’s seen several increases and a doubling for passengers travelling other than in economy class (Reduced Rate = economy class; Standard Rate = premium class).

    Four geographical bands were introduced in 2009 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). Bands C and D were abolished in April 2015, with those destinations subsequently charged at band B rates.

    APD on economy flights for children under 12 was abolished from 1 May 2015. APD for under 16s was abolished from 1 March 2016.

    APD rates increased in line with inflation on 1 April 2017 and the RPI uprating will continue in 2018. The Government has announced that rates to take effect on 1 April 2019 will be set in the 2017 Autumn Budget. The future rates are shown alongside the current ones:

    Bands (approximate distance in miles for the UK) Reduced rate Standard rate
      Rate from 1 April 2017 Rate from 1 April 2018 Rate from 1 April 2017 Rate from 1 April 2018
    Band A (0-2000 miles) £13 £13 £26 £26
    Band B (over 2000 miles) £75 £78 £150 £156
     

    The tables specifying which countries and territories fall into each of the APD bands can be found on the HM Revenue & Customs website (Appendix 1).

    Per the Office of Budget Responsibility (OBR) forecasts, APD is expected to provide £3.2bn receipts in 2016-17, rising to £4.1bn by 2021-22.

    Devolution

    Concurrent with the 2016 Autumn Statement the Government published a summary of responses to HM Treasury’s consultation on how to support regional airports in England from the potential effects of devolution. No measures are planned, but HMT will review after Brexit.

    Northern Ireland

    The Government devolved APD on direct long-haul flights from Northern Ireland (those where the first part of the journey is to a destination outside Band A) to the NI Executive and, effective 1 January 2013, these were set at £0.

    It’s understood that whilst NI politicians accept the merits of APD abolition on short-haul flights (including those connecting at another airport onto a long-haul flight), they consider APD to be a national issue and therefore will not take it further locally.

    Scotland

    On 22 January 2015, the devolution of APD to Scotland was announced as part of the Scotland Bill.  The Scottish Government has committed to reducing APD by 50% over the term of the next Scottish Parliament between 2018 and 2021, and to abolishing it completely when public finances allow.

    The Scottish Government consulted and met with stakeholders through its Scotland APD Stakeholder Forum which ABTA was part of.

    The Air Departure Tax (Scotland) Bill will take effect on 1 April 2018. The Bill (primary legislation) does not set out the new rates, bands or exemptions (these will form part of the secondary legislation). It confirms that Revenue Scotland will be responsible for the collection and management of the tax. The Bill is undergoing scrutiny by the Scottish Parliament’s Finance & Constitution Committee.  The Committee has called for independent economic and environmental impact assessments to be undertaken.

    Wales

    The Government has decided not to devolve APD to the Welsh Assembly. Welsh MPs sought its devolution during the Wales Bill debate but were not successful.

    ABTA’s position

    ABTA accepts that aviation should pay its proper environmental cost but believes that cost is more than reflected in the current APD levels.

    ABTA has campaigned vigorously with its trade partners through the A Fair Tax on Flying campaign (see below) to have APD frozen until a proper economic impact assessment of APD is carried out by HM Treasury.

    ABTA believes the general public must not be disenfranchised by the Government using economic instruments as a means of raising the costs of aviation and that UK travellers should not be penalised. Tax rises are socially regressive and will impact most upon those who can least afford it and lead to families being priced out of taking flights. This is especially acute for lower socio-economic groups and ethnic minorities visiting friends and relatives abroad.

    ABTA welcomed the changes to the banding system as a first step in the reform of this damaging tax. Moving all long-haul flights into Band B of APD will save passengers and businesses over £200m annually, and should boost travel and tourism as well as promote greater UK connectivity.

    ABTA welcomed the announcement by the Chancellor that APD would be scrapped on economy flights for children – worth some £50m annually - a clear indication that the Government listened to the case made by the A Fair Tax on Flying campaign to ‘Scrap the Tax on Family Flights’.

    ABTA responded to the Scottish Government consultation on a Scottish replacement to APD recommending a simple tax as similar as possible to APD be introduced with Band A extended to reflect the greater distance from Edinburgh to many capital cities. We have reiterated the need for early notice of the rates, bandings and exemptions.

    ABTA has continued to call for a reduction in overall rates of APD across the whole of the UK to ensure that rates of APD are consistent and competitive for the benefit of the whole of UK plc and all UK consumers.  APD continues to inhibit the contribution of the travel and tourism sector to growth and employment.

    A Fair Tax on Flying campaign

    ABTA is a founding member of the A Fair Tax on Flying (AFTOF) campaign, an alliance of 25 leading travel organisations including airlines, airports, trade associations, unions and destinations who believe that APD is too high and that it is negatively impacting on the economic competitiveness of the UK. The campaign has called on the Treasury for a significant reduction in APD pending commissioning a comprehensive study into the full economic effects of aviation tax in the UK, including its impact on employment. This would show that the UK is open for business post Brexit to fit in with the Government’s Global Britain messaging.

    For more information, please visit www.afairtaxonflying.org or visit our Facebook page.