Chancellor George Osborne announced a reduction in air passenger duty (APD) on some long-haul flights in yesterday’s Budget.
In his Budget Report to the House of Commons, he said that he will reform APD to tax all long-haul flights at the same rate as those to the United States.
This is good news for the Caribbean, as passengers have had to pay the higher rate of APD to travel there than those that have gone to Hawaii, which is further away, but on a lesser APD band.
Osborne said: “I want to reform the crazy system whereby you pay less to travel to Hawaii than to fly to China or India.
“It hits exports, puts off tourists and creates a great sense of injustice in our Caribbean and southeast Asian communities in the UK.
“From next year, all long-haul flights will carry the same, lower Band B tax rate that you now pay to fly to the United States.”
The changes will mean that a family of four flying economy class to the Caribbean will save at least £64, and passengers flying economy to Australia will save around £27, and £108 in premium cabins.
Although hailed as a victory for the tourism industry, he also made clear that this was to help British businesses strengthen links to high growth business markets abroad and to make the UK an attractive option for business visitors as well as tourists.
The changes will be put in place on 1st April next year.