FTO loses case against APD hike
The Federation of Tour Operators has voiced “disappointment” that the High Court, hearing a Judicial Review of aspects of the government’s decision to double Air Passenger Duty, has failed to uphold a case presented by operators.
“There are wider potential international ramifications of the judgment, and these and other aspects will be considered as the FTO seeks advice on its grounds for possible appeal,” a statement from the FTO said.
The case arose from the government’s failure to give the holiday industry sufficient notice of the tax rise – against all previous precedent regarding APD – costing operators some £50 million which, unlike airlines, they were unable to build into prices for those already booked to fly, the FTO said
A judge found that there were no insurmountable legal or administrative difficulties preventing the government from giving tour operators exemption in relation to existing bookings.
Its decision to ignore the industry’s calls for this exemption effectively imposed “a major and wholly unexpected financial penalty” for the sector to absorb, one which disadvantages it against its many travel and airline industry competitors, the FTO claimed.
The government also sought to make the case that the doubling of the tax was an environmental measure, but, according to the FTO, the retrospective imposition of the tax increase on bookings already made showed that this element of the tax could in no way contribute to the Treasury’s stated environmental aims
The legitimacy of the industry’s objections was reflected in it being granted permission to bring the case, added the federation.
TUI Travel said it firmly believed this was an “unfair penalty” for operators to absorb, and was one that left it “unjustly disadvantaged” against many of its travel and direct airline industry competitors.
TUI Travel said that during the hearing the government defence largely failed to have an adequate argument for why the constraints of the tour operators were largely ignored by the Treasury when the change was introduced and couldn’t justify any legal or administrative difficulties preventing Treasury from giving tour operators an exemption in relation to existing bookings.
Peter Long, CEO of TUI Travel, said: “We don’t agree with the judgement and are considering the grounds on which we can appeal to either the UK or European Court of Appeal.”
by Phil Davies
Phil Davies
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