Budget 2021: Chancellor set to cut Air Passenger Duty tax on some domestic flights

‘Rishi Sunak should be investing in trains, not removing passenger duty from domestic flights,’ says campaigner

Simon Calder
Travel Correspondent
Wednesday 27 October 2021 09:12 BST
<p>Chancellor of the Exchequer Rishi Sunak (Aaron Chown/PA)</p>

Chancellor of the Exchequer Rishi Sunak (Aaron Chown/PA)

The chancellor is expected to cut Air Passenger Duty (APD) for some domestic flights in today’s Budget speech.

The Independent understands that Rishi Sunak will reduce the flat-rate tax on departures between Great Britain and Northern Ireland to zero – cutting the cost of a domestic return flight connecting England, Wales or Scotland with the airports of Belfast or City of Derry by £26.

For travellers in business class, for example on British Airways between London Heathrow and Belfast City, the air fare will fall by £52.

In addition, flights to airports in the Scottish highlands and islands are expected to become APD-exempt. At present departures from Inverness and other airports in the north and west of Scotland are tax-free, but journeys to them are not.

Despite the government’s policy on sustainable transport, Air Passenger Duty is expected to be cut for some journeys within Great Britain, where rail and road options are readily available.

The cost of an easyJet flight from Birmingham to Glasgow – venue for the Cop26 summit – could fall, encouraging travellers to switch from rail to air on the 260-mile link.

At present fares of £30 one-way are available on this route on most dates in November, including during the climate summit.

The tax cut is expected to be portrayed as part of the government’s “levelling up” agenda.

One of the stated priorities of the Department for Transport (DfT) is: “Tackle climate change and improve air quality by decarbonising transport.”

Ahead of the Budget, the environmental group Communities Against Gatwick Noise and Emissions (Cagne) tweeted: “Rishi Sunak should be investing in trains, not removing passenger duty from domestic flights. It flies in face of [the] climate emergency.”

The chancellor is also expected to reverse some of the Air Passenger Duty cuts for longer flights that were made by David Cameron’s government ahead of the 2015 election.

At present all flights over 2,000 miles are charged at the same rate of APD: £82 in economy class, £180 for premium economy, business and first class.

These are set to increase to £84 and £185 respectively from April 2022.

Leaks from the Treasury suggest that a new band for flights to destinations more than 6,000 miles away could be introduced.

The higher tax would affect only a small number of travellers: while Singapore, Buenos Aires and Perth are over the 6,000-mile boundary. journeys to Thailand, Hong Kong and Japan are just inside it.

The New Economics Foundation has argued for APD to be replaced by a “frequent flyer levy”. The think tank says it should start at zero for the first flight, but increase for every subsequent flight taken within a year.

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