Air tax ‘to raise more than beer and cider duties’
Passengers paid £158 million more in air tax last year than in 2013/14, a rise of 5.2%, and the Office for Budget Responsibility estimates it will rise by a further £500 million over the next Parliament.
The British Air Transport Association (BATA) said the rise is expected despite the abolition of air passenger duty for under 12s from this Friday and for under 16s from next March, and the ditching of the higher rate tax band.
It claimed that APD will raise £3.7 billion a year by 2019/20 – roughly in line with the Bank Levy but more than beer and cider duties, which will raise £3.6 billion, and the TV licence fee.
The total number of passengers who paid APD in 2014 was 105.9 million – 1.5 million fewer than the pre-financial crisis peak year of 2007.
However, the amount of revenue raised by APD has increased by over 70% over the same period – from £1.8 billion in 2007 to over £3.1 billion in 2014.
"The UK has the least competitive tax on flying in the world and the highest in Europe by a big margin," said BATA.
"Germany has the second highest air passenger tax in Europe, but it raised just £745m from its Aviation Tax in 2014. Most European countries don’t tax their citizens or visitors to fly abroad."
Both the SNP in Scotland and the DUP in Northern Ireland have set out their desire to see APD abolished in their respective manifestos, which means that a hung Parliament could see political pressure build for further significant action to be taken, said BATA.
Responding to the publication of the new HMRC statistics which showed the amount collected in APD, BATA chief executive Nathan Stower said: "These new statistics are worrying for anyone who cares about increasing exports, encouraging business growth and investment, and expanding tourism.
"It’s time to ask ourselves why our competitors either don’t tax air travel at all or do so at significantly lower rates.
"It makes no sense for an Ireland trading nation to have the highest tax on air passengers in the world. The next government should transform our competitive position and abolish this damaging tax on trade, tourism, families and businesses in the new Parliament."
Commenting on the new APD statistics, IAG chief executive Willie Walsh said: "Passengers paid £3.17 billion in APD in 2014/15 – an increase of 824% since its first full year in 1995/96. Over the same period inflation rose by just 82%.
"This tax is completely out of control. It is the highest aviation tax in the world and it damages economic growth and jobs. No wonder the Scottish government wants to abolish it. APD should be scrapped UK wide."
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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