Chancellor George Osborne has announced the abolition of Air Passenger Duty (APD) for children under 12 from next May.
The announcement in today’s Autumn Statement by the Treasury could provide a significant fillip to travel. The industry coalition A Fair Tax on Flying launched a campaign to demand the scrapping of APD on under-12s only last week.
The Chancellor went further than expected and pledged to abolish APD for children under 16 from 1 May 2016.
Abta immediately welcomed the move and the British Hospitality Association (BHA) noted: “The cut in APD is good news for the outbound tourism industry in encouraging more families to vacation abroad.”
Jason Waldron, product and marketing director at Broadway Travel, said: “Common sense has prevailed. The Chancellor has made the family holiday a little more affordable.”
The move will halve the APD on the holiday air fares of a family of four while costing the Treasury just £52 million a year.
In his Autumn Statement, Osborne also pledged to make airlines list all taxes and charges on tickets.
The APD cut will come into force next May a month after the current four APD rates go down to two – reducing APD on fares to the Caribbean and other long-haul destinations to the same rate as to the US. The Chancellor announced that change in March.
Further change is on the cards after the Smith Commission on Scottish Devolution proposed last week that the Scottish Parliament have the power to axe APD.
In other moves today the Chancellor announced a review of business rates which is expected to help High Street shops.
However, the Chancellor’s statement did not please the inbound and domestic tourism sectors. The BHA said: “The real issue is that the government’s help is urgently needed by struggling coastal and rural regions of our country.
“The Chancellor has missed an important opportunity to help thousands of small and medium sized hospitality enterprises, upon which so many coastal and rural communities depend for their jobs and livelihoods.”