Budget 2014: Air Passenger Duty reforms welcomed by airlines

 

Airlines welcomed reforms to the Air Passenger Duty on UK flights announced by the Chancellor in the Budget today.

The flight tax’s existing banding system sees travellers’ rate of APD calculated according to the distance between London and the destination country’s capital city.

That means flying 4500 miles to Jamaica costs £300 in APD while travelling 7000 miles to Hawaii sees the tax charged at £240.

But George Osborne announced a change to the banding rules so that all long-haul flights will now carry the same tax as a flight to the US.

He also slapped the tax on private jets, which had previously been exempt.

APD has risen by up to 470 per cent since 2007, with a family of four paying between £52 and £376 each time they fly from Britain, depending on how far they travel.

A Virgin Atlantic spokesman said: “This is a very welcome simplification to remove some of the biggest distortions of the current system, which the Chancellor himself admitted is crazy and unjust. The Government has rightly recognised the damage APD is having on exporters and the travelling public alike.

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“A tax system which penalised high growth emerging economies such as China and India was always contrary to the Government’s stated policy on trade and exports, so this is a positive step that recognises the impact of this economically damaging tax.

“There is a growing body of evidence demonstrating the huge economic benefits to the UK of reducing or abolishing APD and we hope that the Government will continue to go further in the long run.”

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