A Fair Tax on Flying campaign has submitted evidence to chancellor George Osborne ahead of this year’s budget, citing the damage the current level of Air Passenger Duty (APD) is doing to the industry.
In its submission the campaign group points to “mounting evidence” illustrating the negative impact APD is having and is calling for a “macroeconomic review” of the effects of the tax.
APD is a duty which is charged on the carriage of passengers flying from a UK airport. In its original form the minimum APD charge on a ticket was £5 and the maximum was £40.
Controversially APD has risen significantly since 2007 and the minimum now is £13 and the highest £188.
The campaign group, who picked up the Outstanding Achievement award at this year’s Business Travel Awards, said the Treasury is looking “increasingly isolated” on the issue of air passenger departure taxes.
“We believe strongly that increases in three of the four APD bands, and year-on-year rises in the APD take are making the UK economy increasingly uncompetitive,” the group’s submission said.
It added: “Since we last wrote to you ahead of last year’s Autumn Statement the Scottish National Party has called for a 50% reduction in APD should they secure independence, with a view to scrapping the tax in the longer-term.
“Experience suggests that cross border air tax disparities can have a significant impact on demand for flying.
“The Republic of Ireland’s Air Travel Tax will be abolished in April 2014. We are concerned that this may have an impact on the competitiveness of flights departing from the Northern Irish capital, which are subject to APD on short-haul journeys.
“We would urge you to monitor the situation in Northern Ireland with regards to the damage that the abolition of the Air Travel Tax will have on flights from the country.”
The submission also cites the growing support for the review and reform of the duty including the fact more than 200,000 people and 100 MPs have called for Osborne to undertake a review of the impacts of APD.
Mark Tanzer, chief executive of ABTA, said: “With the UK economy showing early signs of economic recovery, now is the time for the Government to look again at this damaging duty.
“APD reform has the potential to accelerate the UK’s recovery and stimulate economic growth. With a growing numbers of MPs calling for a review, we urge the Chancellor to listen to the growing calls from across the political spectrum for action on this crucial issue.”
British Air Transport Association’s CEO, Simon Buck, said the UK is increasingly isolated on APD. “Germany has frozen its equivalent tax, the Republic of Ireland has scrapped its version and the SNP are pledging to reduce the tax under an independent Scotland,” he said.
The 2014 APD increases (coming into force on April 1st) will result in the following APD levels being applied to passengers:
- Band A (flights between 0-2000 miles) will remain at £13 in economy and £26 in all other classes
- Band B (flights between 2001-4000 miles) will be increased to £69 in economy and £138 in all other classes
- Band C (flights between 4001-6000 miles) will be increased to £85 in economy and £170 in all other classes
- Band D (all flights over 6001 miles) will be increased to £97 in economy and £194 in all other classes