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Reduction in APD on long-haul flights
Mar 20th, 2014 by elisa

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.

Air tax changes will increase pollution, says easyJet
Jun 25th, 2011 by jason

Government proposals to increase taxes on short flights and reduce them on long ones will lead to longer flights and more pollution, says easyJet.

A report commissioned by the budget airline says the proposed changes will:

  • Reduce UK passenger numbers by 3 million a year
  • Increase CO2 emissions by up to 360,000 tonnes per year
  • Reduce tourist spending in the UK by £475m a year
  • Reduce UK GDP by £2.6 billion per year
  • Lead to the loss of up to 77,000 jobs

The government proposes to increase Air Passenger Duty (APD) from £12 to £16 per person on flights up to 2,000 miles, but reduce the rates and number of tax bands on long haul flights. Some environmentalists, as well as easyJet, favour a fixed tax on flights rather than passengers, so that the fuller the plane, the lower the tax per passenger.

“This independent report shows that the Government’s proposals on APD would be bad for the environment and the economy,” said easyJet CEO Carolyn McCall. “APD has already risen by 14 per cent since 2007 on short haul flights. This report provides convincing evidence that the Government should not impose further increases in APD on short haul flights and should rethink its policy on aviation taxation.”

Virgin Atlantic also weighed in to the debate, saying: “We share concerns about the impact of further increases on APD on family holidays, British business, and tourism alike. In Britain we already have the highest flight tax in Europe, with a family of four travelling to Florida paying £240 in APD alone.”

However, Virgin predictably supported shifting taxes from long flights onto short ones: “Currently passengers within the EU account for 78 per cent of all flights, but just 41 per cent of APD revenues, and we hope that the Government will look to address this in its current review.”

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