Air Passenger Duty (APD)

Air Passenger Duty (APD) – Treasury consultation a waste of time

These outcomes of the Treasury’s APD reforms consultation show that’s it all been a huge waste of time.

The detailed responses from airlines, passenger groups, and a range of international governments have been ignored.

Instead, the same old tired system has been retained but with yet more increases to the rates – everybody loses except HM Treasury.

 

Background

Air Passenger Duty (APD) has been the subject of such steep increases by the UK Treasury in recent years, that international governments, as well as travellers and airlines, have complained loudly to the UK Treasury.

In its eventual response to the clamour, the Treasury launched an APD consultation earlier in 2011, containing some interesting potential reforms. These included the :

  • change of the current 4-band charging structure to one of 2 or 3 bands
  • discounting of Premium Economy APD from Standard APD rates to Reduced
  • inclusion of executive jet passengers in to the APD regime
  • possibility of devolving APD rates and/or revenues.

In their various responses, the industry at large seemed to agree that the first three items required change.

Furthermore, the Treasury was canvassed not to impose any increase at all for 2012/13, and not to pass any further increase to airlines and passengers who had already purchased their tickets.

It has taken two occasions so far for Treasury to trickle feed its consultation decisions.

On 29 November , whilst not announced publicly, the Chancellor’s Autumn Statement document advised that:

  • the 4 band structure would stay for 2012
  • all APD rates are going up from April 2012, and that
  • the new rates would be chargeable on all travellers, including those who have already paid for their tickets
  • passengers on executive jets would be charged, but not until 2013!

NB. Previously announced, for reasons already well-aired, direct long-haul flights from Northern Ireland would be charged at Band A rates

On 06 December, it was further announced that because of either complexity, cost, or would cost some people more so there would be:

  • no changes to the banding system
  • no change to the way that Premium Economy passengers were charged,
  • but that there would be no definite decision, pending further work, on devolved APD revenue and rates.

This cannot be the end of the matter.

BAR UK, and other industry leaders, will continue to campaign for an equitable aviation tax system that doesn’t discriminate against air travellers.

The increased APD rates for travel from 1 April 2012 are shown in the table below.

. Reduced rate Standard rate (includes Premium Economy)
Band A (0-2000 miles from UK) £13 £26
Band B (2001-4000) £65 £130
Band C (4001-6000) £81 £162
Band D (over 6000) £92 £184
NB: Standard APD rates are twice reduced rates.

The rates until then (that took effect 01 November 2010) are shown in this table below.

Band and approximate distance from London to capital cities of countries, in statute miles. Basic Economy Class
(Reduced Rate) 		In all other classes*, normally Premium Economy Class Business Class First Class
(Standard Rate)
. From:
1 Nov 2010		 From:
1 Nov 2010
Band A countries
(Capital cities are 0-2000 miles from London) 		12 24
Band B countries
(Capital cities are 2001-4000 miles from London) 		60 120
Band C countries
(Capital cities are 4001-6000 miles from London) 		75 150
Band D countries
(Capital cities are more than 6001 miles from London) 		85 170

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