Rates of Air Passenger Duty should be simplified into two bands, a lower rate for short and medium haul flights and a higher rate for long haul flights, according to the Association of ATOL Companies (AAC).
The association criticised a consultation paper from HMRC on changes to rates of APD from April next year. A review of the proposed changes ends on Friday and this week Abta, which has put together a Fair Tax on Flying coalition to demand reform of APD, was in Northern Ireland to highlight the unfairness of the tax and the harm it is causing to Belfast's two airports.
AAC chairman David Mortimer said: “We decided that simplicity was vital but that the proposals put forward by HMRC still did not satisfy the obvious test of common sense. Few people would see Egypt as a long haul flight and for that reason we believe that the lower rate of APD should be payable for flights up to 3,000 miles in length rather than 2,000 miles.”
AAC legal advisor Alan Bowen added: “Our proposals will also put flights to the Caribbean on the same rate as flights to the United States.
“Any changes must recognise the fact that raising tax rates affects demand for the product and we believe the current double rate of APD for premium economy seats on both scheduled and charter flights is unfair and unreasonable and have proposed that the rates be dropped to the current rate for economy seats or at worst, a mid way point.
“We also expressed concern that the lowest rate for short and medium haul flights, proposed at £16, should not rise to the point that customers living in Scotland, Northern Ireland and elsewhere are prevented from travelling due to the cost of APD.”
Mortimer said: “We recognise that the government see APD as a fundamental method of raising tax revenues and accept that there is going to be no early reductions for consumers or the trade. Nevertheless, we believe the current system is over-complicated and has a number of obvious anomalies.”
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