Passengers paid £3.17 billion in Air Passenger Duty (APD) in the financial year 2014-15 – an annual increase of £158 million or 5.2% – new statistics published today by HM Revenue and Customs show.
The Office for Budget Responsibility estimates that the tax take will increase by a further £500 million during the next Parliament, despite the duty being abolished for children under 12 from Friday, for under 16s from March 2016 and a recent simplification of the duty’s banding system.
APD is forecast to raise £3.7 billion a year – more than beer and cider duties (£3.6 billion) and the TV licence fee (£3.3 billion), and the same amount as the Bank Levy by 2019/20.
The total number of passengers paying APD in 2014 was 105.9 million – 1.5 million fewer than the pre-financial crisis peak year of 2007.
However, the amount of revenue raised by APD has increased by more than 70% over the same period – from £1.8 billion in 2007 to over £3.1 billion in 2014.
Both the SNP and the DUP have set out their desire to see APD abolished in their respective manifestos which means that a hung Parliament could see political pressure build for further significant action to be taken, according to the British Air Transport Association (Bata).
Bata chief executive, Nathan Stower, said: “These new statistics are worrying for anyone who cares about increasing exports, encouraging business growth and investment, and expanding tourism.
“It’s time to ask ourselves why our competitors either don’t tax air travel at all or do so at significantly lower rates. It makes no sense for an isIand trading nation to have the highest tax on air passengers in the world.
“The next government should transform our competitive position and abolish this damaging tax on trade, tourism, families and businesses in the new Parliament.”
International Airlines Group chief executive, Willie Walsh, slammed the latest rise in APD.
“Passengers paid £3.17 billion in APD in 2014-15 – an increase of 824 per cent since its first full year in 1995-96. Over the same period inflation rose by just 82%,” he said.
“This tax is completely out of control. It is the highest aviation tax in the world and it damages economic growth and jobs.
“No wonder the Scottish government wants to abolish it. APD should be scrapped UK wide.”