Budget special: APD freeze saves passengers £145m a year
The Chancellor’s decision to delay an increase in aviation tax for 12 months will see travellers paying £145m less than if the rise in air passenger duty had gone ahead as planned, said ABTA.
However, it warned that passengers face a double-whammy next April when air passenger duty will go up twice, forcing them to pay out a total of £300m extra in taxes.
ABTA also joined operators TUI and Thomas Cook in accusing the government of back- tracking on its manifesto pledge to replace APD with a per plane duty which, it said, would incentivise airlines to fly with higher loads and to invest in more modern, less polluting aircraft.
Chief executive Mark Tanzer said: “We are pleased that the Chancellor has seen sense and resisted the temptation to increase aviation tax this year.
“It is also good news that he has recognised that the current system of aviation taxation has structural flaws in terms of banding and premium economy. We will now be reviewing the details of the consultation and the proposed tax changes to make sure that changes to the way APD is collected is not used as a cover to increase taxation further.
“The freeze in APD this year will be good news to holidaymakers with travellers paying £145m less than they would have had without this cut. It is only a brief pause from the continuing hiking of APD though as travellers will be hit in 2012 by a double tax increase totalling £300 million on top of the £2.2 billion already going to the Treasury”.
“We will be seeking clarification from Government as to how much of the £2.2bn they expect to raise from emissions trading will be from aviation."
Tanzer said the Government had listened to the ABTA-led Fair Tax on Flying campaign, which called for a review of APD, which sees passengers flying to the Caribbean paying more than those heading to the west coast of America and premium economy passengers paying the same as business class passengers.
But he added: "We still have work to do to convince them to offset income from emissions trading (ETS) against total APD revenue. This sounds technical, but the financial impact on travellers could be considerable if government continues on the path of taxing flights with APD and carbon from planes with ETS.”
ABTA welcomed the Government’s commitment to consult on the extension of aviation tax to private and business jets, which it said was an unfair and unjustifiable anomaly.
The Budget estimates an income of £2.2bn by 2015/16 from the EU’s Emission Trading Scheme and income of £400m this coming year. Aviation enters the Emission Trading Scheme from 1 Jan 2012. ABTA is calling on the Government to offset aviation’s contribution to these amounts against revenue raised through Air Passenger Duty.
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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