Chancellor Jeremy Hunt has confirmed that the rate of air passenger duty for non-economy flights will increase.
In his Budget announcement, he said the tax rise for premium seats will account for high inflation.
The tax was already due to rise on 1 April from £13 to £14 for domestic flights, and from £200 to £202 on the longest international flights.
The Chancellor did not specific how much extra he will add to the tax or when.
Ian Sinderson, CEO of travel management company ATPI said a further rise will ‘hamper the stuttering recovery of the business travel industry’.
Following the Chancellor’s Budget announcement today, Ian said: “ATPI urges the government to stop treating the travel industry as a bottomless pit of potential taxation and, instead, create a more competitive market for airlines and travellers, in line with the prices enjoyed by our European neighbours.
“British businesses have faced significant headwinds post-pandemic, leading to a cut in business travel spend and slow business travel industry recovery, which is estimated to make up 1% of the UK’s GDP.
“Increasing Air Passenger Duty in the UK for business travellers – which already sees some of the highest APD rates in the world – may force more travellers to opt for economy tickets or forego travelling for business altogether, which would be catastrophic for this recovering industry.”
Announcing its annual results last month, British Airways confirmed that business travel had been slow to return after the pandemic, but the airline said there had been higher demand from leisure travellers for premium seats.
The rise in air passenger duty on premium seats is one of a package of measures designed to fund a 2p cut in National Insurance, also announced in the Budget. Other fund-raising measures include scraping tax relief on holiday lets.
UKinbound CEO Joss Croft said the cut in National Insurance, together with a freeze in fuel and alcohol duty, will have a positive impact on the UK tourism industry, but he added: “The absence of a new fiscally positive tax-free shopping scheme is a huge missed opportunity, that would stimulate growth and bring massive and much needed additional export revenue to the UK.
“This is a shame as international tourism is incredibly competitive, and with the right policies this industry can quickly deliver incredible growth for UK plc in the short and long term.”
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In his Budget announcement, he said the tax rise for premium seats will account for high inflation.
The tax was already due to rise on 1 April from £13 to £14 for domestic flights, and from £200 to £202 on the longest international flights.
The Chancellor did not specific how much extra he will add to the tax or when.
Ian Sinderson, CEO of travel management company ATPI said a further rise will ‘hamper the stuttering recovery of the business travel industry’.
Following the Chancellor’s Budget announcement today, Ian said: “ATPI urges the government to stop treating the travel industry as a bottomless pit of potential taxation and, instead, create a more competitive market for airlines and travellers, in line with the prices enjoyed by our European neighbours.
“British businesses have faced significant headwinds post-pandemic, leading to a cut in business travel spend and slow business travel industry recovery, which is estimated to make up 1% of the UK’s GDP.
“Increasing Air Passenger Duty in the UK for business travellers – which already sees some of the highest APD rates in the world – may force more travellers to opt for economy tickets or forego travelling for business altogether, which would be catastrophic for this recovering industry.”
Announcing its annual results last month, British Airways confirmed that business travel had been slow to return after the pandemic, but the airline said there had been higher demand from leisure travellers for premium seats.
The rise in air passenger duty on premium seats is one of a package of measures designed to fund a 2p cut in National Insurance, also announced in the Budget. Other fund-raising measures include scraping tax relief on holiday lets.
UKinbound CEO Joss Croft said the cut in National Insurance, together with a freeze in fuel and alcohol duty, will have a positive impact on the UK tourism industry, but he added: “The absence of a new fiscally positive tax-free shopping scheme is a huge missed opportunity, that would stimulate growth and bring massive and much needed additional export revenue to the UK.
“This is a shame as international tourism is incredibly competitive, and with the right policies this industry can quickly deliver incredible growth for UK plc in the short and long term.”
The post Chancellor confirms increase in air tax for premium seats appeared first on Travel Gossip.
Continue reading...
