Chancellor Alistair Darling retreated from a commitment to replace Air Passenger Duty with an aviation duty in today’s pre-Budget report, instead announcing two new bands of APD and an increase in charges.
The changes will add £15 in tax to a flight to Australia from next November and £45 from November 2010.
Air Passenger Duty is currently levied at £10 on economy flights within Europe and £40 beyond, with premium seats taxed at double those rates.
Charges will be levied across four bands from November 2009 – band A covering Europe, band B extending 4,000 miles to destinations such as Egypt, Bahrain, the Gambia and the US, band C taking in the Caribbean and band D for Australia and New Zealand.
The standard rate of APD will rise just £1 to £11 next November, but the band B rate will rise £5 to £45, flights in band C will carry £50 APD and band D flights will carry £55 tax. Seats in premium cabins will be taxed at double these rates.
APD will rise further in November 2010 – to £12 in band A, £60 in band B, £75 in band C and £85 in band D.
Federation of Tour Operators director general and ABTA head of development Andy Cooper expressed disappointment at the Treasury’s failure to replace APD and described the increased rates from 2010 as “significant”.
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