Budget 2020: Government to review Air Passenger Duty
The government has announced that it will undertake a review of Air Passenger Duty (APD) as a part of its new Budget, after calls from the aviation industry to scrap the tax.
It said that it would “consider the case for changing the APD treatment of domestic flights, such as reintroducing a return leg exemption, and for increasing the number of international distance bands”.
The results of the consultation will be published in the spring. At present, rates will remain frozen on short-haul flights at £13, but the rate for long-haul economy will increase by £2.
There will be a £4 increase for those travelling in premium economy, business and first class, and £13 for those using private jets.
Last week regional airline Flybe collapsed after it was revealed that the relief from APD that the government had offered would not come into effect until 2021.
The government said that regional connectivity was “a cornerstone of the government’s levelling up agenda” and that “the aviation industry has an important role to play in connecting the nations and regions of the UK”.
Members of the industry had argued for a suspension of the tax due to the immense pressure that the coronavirus outbreak was placing on the sector, and some reacted with anger today.
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British Airways owner IAG said: “Given the acute pressure on business, the hike in APD will make it even harder for UK firms to trade overseas. This is a tax on business.
“Last year, IAG paid around €1bn in APD to the Treasury. This costs UK jobs and growth. If the government is serious about making Britain a global trading economy, the world’s highest aviation tax should be scrapped now.”
Pilots’ union BALPA said it was “incredibly disappointed” that there had been no mention of “how our government is going to help our aviation industry.
“Unless the government wishes to see more UK airlines go under we must see some urgent action from the Treasury – we can’t wait until spring for this situation to be addressed.”
Airline group BAR UK said that it was “ludicrous” that the chancellor had given concessions to alcohol but had increased APD:
“Airlines had requested a temporary six month waiver of APD as a supporting measure while they deal with this unprecedented situation.
“The lack of action and support for aviation in this Budget demonstrates a Chancellor and Government that has not placed enough importance on sustaining the UK’s domestic and international air connectivity at the very time it is needed most.”