Travellers in the UK pay some of the world’s highest taxes on flying, according to a study by UHY Hacker Young, the national accountancy group.
The UK imposes Air Passenger Duty (APD) of £13 on short haul flights and £71 on long haul flights leaving from airports in England and Wales, but excluding flights from Northern Ireland. The study analysed taxes and compulsory government charges imposed per passenger on an economy class flight by 20 governments around the world. It also analysed additional charges imposed on a per passenger basis by airport operators.
According to the study, charges levied by the UK are currently the highest within the EU and well above the average for G7 countries, which is at £10 ($15) on short haul flights and £23 ($34) on long haul flights. The global average, based on countries where aviation taxes are imposed, is currently £15 ($23) on short haul flights and £35 ($53) on long haul flights. However, many countries such as Ireland, Slovakia and Belgium do not impose any taxes on individual air passengers currently.
According to researchers, the extra charges impact tourism, penalise SMEs trying to expand overseas, disadvantage remote regional cities, and also affect airlines’ abilities to offer less profitable routes. In addition, although taxes on flying are often billed as ‘green taxes’, in the UK, as elsewhere, the revenue raised is not utilised for environmental protection projects.
The report also noted that the UK government is presently adopting measures to reduce the high costs facing air passengers. In May this year, the APD for under-12s was abolished. As of April 1, charges on journeys over 4,000 miles were also reduced; however, levies on journeys between 2,000 and 4,000 miles have increased, it said.
Roy Maugham, Tax Partner of UHY Hacker Young, commented: ‘Airlines provide a crucial piece of infrastructure. They facilitate a great deal of economic activity that is essential for countries that want to benefit from globalisation. The higher taxes on flying in the UK hurt airlines, business users and consumers.’
‘The recent lowering of charges for under-12s and long haul travellers and the discussions in Northern Ireland indicate an awareness of the problem, but the reforms do not go far enough. Charges remain considerably higher than in many other EU countries.’
Commenting on the need for transparency in airport and airline charges, Maugham added: ‘In the UK and around the world, the issue of complex charges is an area where far greater progress needs to be made to ensure better transparency and competition. Businesses and consumers would greatly benefit if regulators and tax authorities kept aviation taxes low and ensured that charges were more transparent.’