UK government asked to abolish air tax

The UK Government has been urged to abolish tax on flights from Britain, in line with the move by Ireland, according to a report by The Telegraph.

Ireland, which had already cut air tax to just €3 per passenger per flight, said earlier this week that it will scrap the tax on flights completely from April 2014.

Commenting that Britain has the highest rate of air tax in the world, Steve Hoy, chief commercial officer at Bmi regional, urged the UK government to adopt a similar policy.

‘This recent tax break highlights that the Irish constituency has recognised the negative impact that the duty has on core industry, tourism and airlines,’ Hoy said, adding: ‘We’re disappointed that UK air travel continues to be subjected to such a considerable levy and urge the UK government to follow suit.’

Following the latest rise in Air Passenger Duty (APD) in April 2013, the standard rate (for non-economy class) of APD for Band A (for destinations less than 2,000 miles from London) is £26. The rate for Band D (more than 6,000 miles) is £188, rising to £194 from April 1 2014. The APD has been cited as the reason for pricing ordinary families out of overseas holidays, discouraging airlines from opening new routes and forcing many to be withdrawn, and causing inbound tourists, who pay the tax on their flight home, to go elsewhere.

A report by C & IT Magazine said that nearly 250 UK business leaders have also signed a petition telling the Chancellor of the Exchequer that Air Passenger Duty (APD) was a ‘significant additional burden’ for businesses.

The petition, organised by the campaign ‘A Fair Tax on Flying’, said that supporters were calling on ‘the Government to undertake urgent action to reduce the world’s highest air passenger tax’. ‘Air travel is vital to the success of our business because it helps us to connect to new markets and reach new customers,’ it said.

Commenting on the situation, an HM Treasury spokesperson said: ‘The Government has frozen APD in real terms since 2010, and in the last year, APD has not changed at all for the majority of flights. Passenger numbers are going up, and airlines do not have to pass on the cost of APD to passengers. However it is important that the aviation sector plays a part in helping to bring down the deficit.

‘International aviation is generally not subject to tax on fuel, and in contrast to many other countries, there is no VAT charged on flights in the UK.’

Meanwhile, announcing the decision to abolish the tax, Irish finance minister Michael Noonan reportedly said that he expected airlines to respond by launching new routes and increasing the frequency of other services.