Government pushes ahead with APD increase

Government pushes ahead with APD increase

Air Passenger Duty will rise this April as expected by double the rate of inflation and in April 2013 in line with inflation, Budget documents have confirmed.

Although no mention was made of aviation taxes in the hour-long Budget address by chancellor George Osborne, Budget papers released as he finished confirmed the expected 8% increase.

The news is a blow to the A Fair Tax on Flying travel industry coalition which had been campaigning right up until today for the planned rises to be scrapped.

In recent weeks the World Travel and Tourism Council has also condemned the tax for the damage it is doing to the UK inbound and outbound tourism industry.

This time last year the government announced a suspension of a planned rise in APD but said that it would go up by double the rate of inflation this year instead.

The government papers state: “(APD) rates will rise from April 2012, as set out at Autumn Statement 2011.

“APD rates for 2013-14 will rise by the RPI from 1 April 2013, as set out in Overview of tax legislation and rates.”

The government also confirmed it will proceed with plans to bring business jets into APD from April 2013 as it set out on December 6 in a Finance Bill consultation.

It further confirmed the already announced cut in APD for flights emanating from Northern Ireland from April and the devolving of the power to set the rate for direct long-haul flights to the Northern Ireland Assembly.

Board of Airline Representatives in the UK (BAR UK) branded the decision to stick with the APD rise a “reckless brake on the economy”.  Mike Carrivick, chief executive of BAR UK said: "The number one priority is economic growth.

“A policy of disproportionately high air travel taxation and a failed aviation policy, provide two glaring examples of how the Government's aim for economic recovery is being damaged by its own doing.

“It is a day-dream to assume that air travellers will continue to pay increased air taxes without shrinking the market. Hitting families and businesses with ever-increasing APD rates and restricting much needed capacity increases at key airports is a recipe for failure.

"To make matters worse, residents and visitors to UK are all affected by yet another aviation tax, under the guise of the EU Emission Trading Scheme (EU ETS). By the time the Chancellor wakes up to the fact that visitor numbers are dropping, other countries will have already benefitted at the expense of the UK.

"We call on the Chancellor to abandon the April APD increase and to reduce the previous rates by the amount of additional income received from the EU ETS."


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