UK Government Decides to Go Ahead with APD Hike

UK Government Decides to Go Ahead with APD Hike

The autumn statement by the Chancellor states that APD rates “will increase from April 1, 2012, as set out at Budget 2011”, with the extension to flights taken on business jets also set to go ahead.

Chancellor George Osborne did not make mention of Air Passenger Duty in his actual speech, but a look at the section on Indirect Taxes in the full statement on the HM Treasury’s websites states that:

“Air Passenger Duty (APD) rates will increase from April 1, 2012, as set out at Budget 2011. The Government will also proceed with the extension of APD to flights taken aboard business jets, effective from 1 April 2013.”

The statement adds that more details will be set out in the Government’s response to the APD consultation on December 6, 2011. It means that travelers will be subjected to a double-inflation rise of around ten percent, with this year's rise having been held back to coincide with next April's hike.

In response four of the UK's major airlines have released a joint statement again calling for APD to be abolished.

Carolyn McCall from Easyjet, Willie Walsh from IAG, Michael O'Leary from Ryanair and Steve Ridgway from Virgin Atlantic jointly said:

“In the cause of UK economic recovery, Air Passenger Duty (APD) is an own goal - and the Chancellor has just scored another one. By increasing this tax by double the rate of inflation, he is further deterring inbound tourism and foreign investment, and choking off yet more job opportunities for young people.

"APD has no international parallel and has already cost the UK economy 25,000 jobs - that is what the Government should focus on.

"We call for the Chancellor to commission an independent study of APD's overall economic value. We have no doubt this would confirm that APD's negative impact on UK GDP significantly outweighs its revenue benefit for the Treasury.