The industry-backed ‘A Fair Tax on Flying’ campaign has today (Monday) repeated its call for a macro-economic review of the effects of Air Passenger Duty.
Members cite mounting evidence illustrating the damage that the current level of tax is doing in a submission of evidence to the Treasury ahead of this year’s Budget.
The lobby group claims that prior to 2014 APD increases coming into force on April 1 that “the Treasury is looking increasingly isolated on the issue of air passenger departure taxes”.
The submission adds that:
- “We believe strongly that increases in three of the four APD bands, and year-on-year rises in the APD take are making the UK economy increasingly uncompetitive.”
- “Since we last wrote to you ahead of last year’s Autumn Statement, the Scottish National Party have called for a 50% reduction in APD should they secure independence, with a view to scrapping the tax in the longer-term.
“Experience suggests that cross border air tax disparities can have a significant impact on demand for flying.” - “[The Republic of Ireland’s] Air Travel Tax, will be abolished in April 2014. We are concerned that this may have an impact on the competitiveness of flights departing from the Northern Irish capital, which are subject to APD on short-haul journeys.
“We would urge you to monitor the situation in Northern Ireland with regards to the damage that the abolition of the Air Travel Tax will have on flights from the country.”
The submission cites the growing support for a review and reform of APD, including more than 200,000 people and over 100 MPs.
Abta chief executive Mark Tanzer said: “With the UK economy showing early signs of economic recovery, now is the time for the government to look again at this damaging duty.
“APD reform has the potential to accelerate the UK’s recovery and stimulate economic growth.
“With a growing numbers of MPs calling for a review, we urge the Chancellor to listen to the growing calls from across the political spectrum for action on this crucial issue.”
BAR UK chief executive Dale Keller said: “A family of four flying to the UK from Australia in economy class from this April will pay £388 in taxes alone. It’s an undoubted disincentive to travel which is putting the UK at a competitive disadvantage.
“It’s no wonder that people are looking for ways to avoid paying APD by multi-ticketing through European hubs. If we want the UK to remain the hub for passengers vising Britain then we have to take action to reduce APD.
“The alternative is that savvy passengers will just start to transit through Amsterdam Schiphol or Paris Charles de Gaulle.”
British Air Transport Association chief executive Simon Buck added: “It’s my hope that the Chancellor will take this opportunity to re-think the Coalition’s approach to taxing air passengers. It’s impossible not to see that the UK is increasingly isolated now on APD.
“Germany has frozen its equivalent tax, the Republic of Ireland has scrapped its version and the SNP are pledging to reduce the tax under an independent Scotland.
“The Airports Commission will take over a year to make its full recommendations and construction of any additional capacity will take many years to build. But we can take action now to make the UK’s aviation industry more cost-competitive: by reducing APD.
“We urge the government to re-think its plans and to listen to the UK’s business community for whom this issue remains a serious ongoing concern.”
The 2014 APD increases from will result in following APD levels being applied to passengers:
- Band A (flights between 0-2,000 miles) will remain at £13 in economy and £26 in all other classe
- Band B (flights between 2,001-4,000 miles) will be increased to £69 in economy and £138 in all other classes
- Band C (flights between 4,001-6,000 miles) will be increased to £85 in economy and £170 in all other classes
- Band D (all flights over 6,001 miles) will be increased to £97 in economy and £194 in all other classes