Air Passenger Duty
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.
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.
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.
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.
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.