An estimated 6.5 million travellers who have booked to fly from the UK after next April face an additional charge when next year’s expected hike in Air Passenger Duty is backdated.
The warning came from Virgin Atlantic based on the prospect of APD being increased from April 1 2012 from £12 per person to £16 for economy flights of up to 2,000 miles.
Confirmation of a rise in APD is widely expected in the Chancellor’s Autumn Statement on November 29. While the rise will cover flights after April 1, anyone buying tickets before April for travel later in 2012 will also be hit.
Virgin said it had already seen several hundred thousand bookings made for flights out of the UK after April 1.
This would amount to an additional Treasury tax bill of almost £5 million from Virgin Atlantic passengers alone if the APD rate rises are similar to the last increase in November 2010. It is likely that around 6.5 million people will have already booked their travel and be subject to retrospective charges.
Virgin Atlantic says any increases should be introduced with a 12 month lead-in time to avoid a situation where passengers are being asked to pay retrospective tax. Chief commercial officer Julie Southern told the Daily Mail: “We are very concerned that the Chancellor has failed to rule out retrospective rises in Air Passenger Duty.
“Hundreds of thousands of our customers could be affected by this, and industry-wide the numbers will be greater still, with millions of people contributing tens of millions in extra payments to the Treasury’s coffers.”
She added: “Just because you haven’t yet used a product you have purchased, doesn’t mean the Government should be able to up the cost.”
The airline said APD raised £2 billion in 2010 but the figure could rise to £3 billion a year.