British Airways launches fresh assault on Air Passenger Duty
One of Britain’s fastest-growing taxes is 20 years old this week.
Relentless rises in Air Passenger Duty mean that a family of four flying to a destination outside Europe will soon pay £284 in tax, compared with just £40 when the levy was introduced on November 1st, 1994.
That seven-fold increase in APD has taken place while inflation has not even doubled over the same period.
APD, which is the highest aviation tax imposed anywhere in the world, has also hugely outstripped other UK taxes such as petrol duty, road tax, duties on alcohol and insurance premiums over the last two decades.
Annual Treasury revenue from APD is now nearly ten times as much as in the tax’s first full year.
In total, air passengers in the UK have paid more than £26 billion in APD since 1994.
Even on short-haul flights, APD has become a big proportion of the ticket price.
The £26 APD payable per person on a return flight within the UK is frequently at least a quarter of the total fare.
According to City analysts PwC, abolition of APD would boost Britain’s economic growth by 0.5 per cent within a year and lead to the creation of 60,000 new jobs without reducing the Treasury’s net revenues.
Willie Walsh, chief executive of British Airways’ parent company IAG, said: “Twenty years on, APD has snowballed out of control and become a tax that works against people wanting to visit relatives and friends, go on holiday or grow their business to create jobs.
“APD is way out of line with both other indirect taxes in the UK and flight taxes in other countries.
“Globalisation has accelerated enormously in the last 20 years.
“This tax helps no-one in today’s economic environment.
“We must call time on APD.”