Air Passenger Duty (APD)

BAR UK position (20 July 2010) re Tax-per-Plane proposal

The proposal of the new government to replace Air Passenger Duty (APD) with a per-plane tax is objected to for four reasons.

1. The Labour administration attempted to do the same thing, and found the practicalities were far more difficult than the theory.

( Link Click here to view our response - Response to Aviation Duty. )

2. The environmental effects of aviation are being managed through the substantial charges of the EU Emissions Trading Scheme, due to be introduced in January 2012. Retaining APD would be a blatant double tax on air passengers, so APD must be discontinued when the EU ETS is implemented.

3. It has been stated that APD revenues would be used to offset a lower income tax regime for the less well-off. This means that air travellers would be discriminated against, and that visitors to the UK charged for the privilege of subsidising tax cuts to UK residents.

4. The effects of a tax-per-plane would be retrograde. They would encourage a change of planes in continental Europe, to escape the punitive charges that would apply on direct flights, thereby increasing total emissions whilst simultaneously reducing Treasury revenues.

BAR UK seeks a revision to these proposals and looks forward to working with government in that regard. Meanwhile, our objections to the current APD structure and increases remain. Please see below.

APD is such an iniquitous tax, that we are fully supportive of the campaign being run by the UK’s Daily Telegraph.

JOIN THE DAILY TELEGRAPH CAMPAIGN HERE (FULLY SUPPORTED BY BAR UK) TO RESIST THE EXORBITANT APD CHARGES & THEIR DAMAGING EFFECTS.

Link Article - Telegraph Air Passenger Duty campaign

BAR UK and its airline members object to the re-structured and increased APD rates that came into effect on 1st November 2009, and which are increased yet again in November 2010.

A series of four charging bands, based on distance flown (this is estimated as the distance between London and the capital city of any other country) forms the basis of APD as set out below.

  • Band A 0 - 2000 miles
  • Band B 2001- 4000 miles
  • Band C 4001 - 6000 miles
  • Band D 6001 + miles

The table below shows what rates will now apply this year and next.

Band and approximate distance in miles from London In lowest class of travel, normally: Basic Economy Class Reduced Rate) In all other classes*, normally Premium Economy Class Business Class First Class(Standard Rate)
  To:
31 Oct 2010 		From:
1 Nov 2010 		To:
31 Oct 2010 		From:
1 Nov 2010
Band A
(0-2000 miles) 		11 12 22 24
Band B
(2001-4000) 		45 60 90 120
Band C
(4001-6000) 		50 75 100 150
Band D
(6000+) 		55 85 110 170

* However, if only one class of travel is available and that class provides for seating in excess of 40 inches, then the standard (rather than the reduced) rate of APD applies

Up ArrowOur objections

  • APD was doubled in February 2007, increased again in November 2009 and yet again in 2010 – the industry and its passengers are being fleeced.
  • By the beginning of 2007, APD was already producing £1 billion in tax for the Treasury, a figure that doubled to £2bn per annum with the increases that took place the following month.
  • Aviation, which has a responsibility to pay its environmental costs, was already doing so before the 2007 increase.
  • NONE of the billions raised is dedicated to any environmental purpose; the monies go straight into the government’s general income system, the Consolidated Fund.
  • The new APD structure (effective November 2009) effectively sees the UK government charging airlines for travel through the skies of other States, right through to the end point of passengers’ journeys.
  • The effect of all these increases is to limit the affordability of air travel, thereby actually reducing the Treasury’s income from APD.
  • The ‘banding’ system used produces inequitable situations for a number of countries.
  • Visitors to the UK will be adversely affected. For example, a family of four, from November 2010, travelling in basic Economy Class, will pay:
    • GBP 48 (Band A country e.g. Italy)
    • GBP240 (Band B country e.g. Dubai, New York)
    • GBP300(Band C country e.g. Barbados, Bangkok)
    • GBP340 (Band D country e.g. Singapore, Sydney)

APD is expected to become a tariff barrier for UK residents going on holiday, and for visitors who wish to come to the UK, many of whom do so to visit friends and relatives.

Up ArrowBAR UK action

  • BAR UK has made direct representations to the Treasury on several occasions:
    • on its own behalf
    • as part of UK aviation interests, and
    • as part of the IATA delegation
  • Has written several letters to the Chancellor
  • Made representations elsewhere within government.
  • Has written to the Treasury to ask for the Nov 10 increase to be taken out of the PreBudget Report.
  • Written to all National Olympic Committees (156) for all Band B-D countries.

This initiative highlights how much APD will be paid by Olympic teams to leave their host nation. It also highlights how APD rates may affect team budgets, and also the possible lack of affordability of air travel to the UK by their supporters.

Their concerns can be expressed though their own Olympic structures, to their governments and to the relevant British Embassy or High Commission.

BAR UK continues to call on the Chancellor to revert to the APD system and charging levels that prevailed until 31 October 2009.

Up Arrow