ABTA has expressed disappointment in Chancellor Rachel Reeves’ first Budget, which included a rise in air taxes and employers’ National Insurance Contributions.
Chief executive Mark Tanzer said it will ‘make life more difficult for travel businesses’, at least in the shortterm.
“Notably, whilst it is welcome that rates relief is extended for a further year, the reality is the 40% rate will represent a significant hike in bills for many high-street agents,” he said.
“Additionally, the cost of employing staff that the industry needs to thrive will increase for many travel firms.” Mark also said that the £2 increase on Air Passenger Duty for short-haul economy flights, was ‘disappointing’.
“While a £2 increase might not sound much, it brings UK air tax on economy flights to £15 per person, per flight.
“UK travellers already pay more on air tax than most other countries, and it is one of a multitude of taxes and charges people often have to pay on their holidays.”
Mark pointed out, not for the first time, that APD is among the fastest growing of all taxes in the UK. The £2 increase, which will apply from April 2026, is higher than the rate of inflation.
“The government must keep a close eye on the overall cost of travel to ensure that hard-earned holidays remain within reach,” said Mark.
However, he said there were some ‘bright spots’ in Wednesday’s Budget. “We welcome recognition from the Chancellor that high street businesses are vital to the health of places across the country, with the announcement of a permanently lower rate of business rates from April 2026, and also investment in the decarbonisation of aviation,” he added.
“ABTA members are responsible for the happiest weeks of people’s year – their holidays, which offer the opportunity to relax, spend time with family and are valuable for mental health and wellbeing.
“The travel industry has made a remarkable recovery after the COVID-19 pandemic, and has bucked the wider consumer confidence trend in recent months with people continuing to spend and commit to their holidays. We hope the additional pressures this Budget puts on businesses doesn’t serve to slow down that trajectory and dampen the sector’s growth opportunities.”
Advantage CEO Julia Lo Bue-Said was more scathing of the Budget, describing the increase in National Insurance and APD as ‘punishing’.
Employers’ National Insurance Contributions have risen from 13.8% to 15% from April 2025, and the threshold at which employers starting paying has been reduced to £5,000.
“With tax hikes piling on top of existing pressures, small business owners are being squeezed from every direction, leaving them with impossible choices between survival and growth,” said Julia.
“The new tax rises come on the back of a tough few years, adding more cost to businesses, when many in our sector are still in recovery mode post pandemic.”
Julia said more detail is required to fully understand the impact of Business Rate reform from 2026, which the Chancellor alluded to, and what impact this will have for business.
“APD sees another tax hike for anyone flying out of the UK, increasingly making the UK an uncompetitive destination. This will not support business growth and puts more pressure on households discretionary spend on travel, business travel and the visitor economy,” she added.
UKinbound CEO Joss Croft also slammed the tax rises. “We welcome the increase in employment allowance, the freeze on fuel duty and the investment in the regional rail networks, however we are incredibly disappointed to see Air Passenger Duty increase and that businesses across the industry will see operating and staff costs rise,” he said.
“As the UK’s second largest service export industry, inbound tourism is an incredibly powerful driver of economic growth across the UK and has the potential to grow 20% by 2027, but businesses in this sector are now facing a new tide of challenges.
“We are however committed to developing a strong working relationship with this Government and will continue to make the case for specific policy changes, such as expanding passport-free travel schemes for under 18-year-olds, enhancing our five-year visitor visa and introducing tax-free shopping, which can deliver immediate growth across the whole of the UK.”
Not Just Travel co-founder Steve Witt was more sanguine. “There is already a lot of tax on travel so we’re grateful it wasn’t increased further,” he said. “Would we rather it didn’t happen? Of course. However, we appreciate that the government has to fund investment, and so a fair and proportionate amount won’t significantly impact anyone’s travel plans.”
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Chief executive Mark Tanzer said it will ‘make life more difficult for travel businesses’, at least in the shortterm.
“Notably, whilst it is welcome that rates relief is extended for a further year, the reality is the 40% rate will represent a significant hike in bills for many high-street agents,” he said.
“Additionally, the cost of employing staff that the industry needs to thrive will increase for many travel firms.” Mark also said that the £2 increase on Air Passenger Duty for short-haul economy flights, was ‘disappointing’.
“While a £2 increase might not sound much, it brings UK air tax on economy flights to £15 per person, per flight.
“UK travellers already pay more on air tax than most other countries, and it is one of a multitude of taxes and charges people often have to pay on their holidays.”
Mark pointed out, not for the first time, that APD is among the fastest growing of all taxes in the UK. The £2 increase, which will apply from April 2026, is higher than the rate of inflation.
“The government must keep a close eye on the overall cost of travel to ensure that hard-earned holidays remain within reach,” said Mark.
However, he said there were some ‘bright spots’ in Wednesday’s Budget. “We welcome recognition from the Chancellor that high street businesses are vital to the health of places across the country, with the announcement of a permanently lower rate of business rates from April 2026, and also investment in the decarbonisation of aviation,” he added.
“ABTA members are responsible for the happiest weeks of people’s year – their holidays, which offer the opportunity to relax, spend time with family and are valuable for mental health and wellbeing.
“The travel industry has made a remarkable recovery after the COVID-19 pandemic, and has bucked the wider consumer confidence trend in recent months with people continuing to spend and commit to their holidays. We hope the additional pressures this Budget puts on businesses doesn’t serve to slow down that trajectory and dampen the sector’s growth opportunities.”
Advantage CEO Julia Lo Bue-Said was more scathing of the Budget, describing the increase in National Insurance and APD as ‘punishing’.
Employers’ National Insurance Contributions have risen from 13.8% to 15% from April 2025, and the threshold at which employers starting paying has been reduced to £5,000.
“With tax hikes piling on top of existing pressures, small business owners are being squeezed from every direction, leaving them with impossible choices between survival and growth,” said Julia.
“The new tax rises come on the back of a tough few years, adding more cost to businesses, when many in our sector are still in recovery mode post pandemic.”
Julia said more detail is required to fully understand the impact of Business Rate reform from 2026, which the Chancellor alluded to, and what impact this will have for business.
“APD sees another tax hike for anyone flying out of the UK, increasingly making the UK an uncompetitive destination. This will not support business growth and puts more pressure on households discretionary spend on travel, business travel and the visitor economy,” she added.
UKinbound CEO Joss Croft also slammed the tax rises. “We welcome the increase in employment allowance, the freeze on fuel duty and the investment in the regional rail networks, however we are incredibly disappointed to see Air Passenger Duty increase and that businesses across the industry will see operating and staff costs rise,” he said.
“As the UK’s second largest service export industry, inbound tourism is an incredibly powerful driver of economic growth across the UK and has the potential to grow 20% by 2027, but businesses in this sector are now facing a new tide of challenges.
“We are however committed to developing a strong working relationship with this Government and will continue to make the case for specific policy changes, such as expanding passport-free travel schemes for under 18-year-olds, enhancing our five-year visitor visa and introducing tax-free shopping, which can deliver immediate growth across the whole of the UK.”
Not Just Travel co-founder Steve Witt was more sanguine. “There is already a lot of tax on travel so we’re grateful it wasn’t increased further,” he said. “Would we rather it didn’t happen? Of course. However, we appreciate that the government has to fund investment, and so a fair and proportionate amount won’t significantly impact anyone’s travel plans.”
The post Labour’s first Budget will ‘make life more difficult for travel’ appeared first on Travel Gossip.
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