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Published on Thursday, March 21, 2013

Chancellor ignores travel industry pleas to scrap air tax

Chancellor George Osborne has disappointed and angered the travel industry by refusing to scrap or even cut the controversial air passenger duty in his Budget announcement yesterday.

The Chancellor said he was "bringing business to our shores with competitive taxes" but made no specific reference to APD.

As previously announced, the tax will rise in line with inflation this year and next.

TUI Travel immediately issued a statement saying it was disappointed with the planned rise in APD in the UK, which is arleady the highest in the world. "We would urge the Government to undertake an impact review of the effects of APD," it said.

In contrast to his stance on air tax, the Chancellor ditched the planned increase in fuel duty in September and announced a range of other tax cuts in his fourth Budget since the Coalition came to power.

These include a reduction in corporation tax by 1% to 20% from April 2015, making it the lowest business tax regime in the world, plus the removal of capital gains tax for the sale of businesses to their employees.

"I want to send a message to anyone who wants to invest here, to create jobs -  Britain is open for business," he said.

The Chancellor said under the Coalition government, tax rates were lower than they were under Labour, but APD has continued to rise.

There was some good news for small to medium-sized travel business, however. The Chancellor announced a new £2,000 Employment Allowance to reduce National Insurance contributions for all companies, making it easier for small businesses to take on their first employee. The measure means that 450,000 businesses - a third of all employers in the UK - will pay no jobs tax.



by Linsey McNeill

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