Why what? Why refund a consumable tax? or the fuel surcharge?

I ask you: Why should an airline get to keep money as profit that was originally paid as a tax to be given to a government in the event I had my butt in that seat when it took off or landed?

But there's an anterior question for you: Was it?

If the airline doesn't break it out, and it's part of the contract that you are not paying anything of that nature, but only an all-in amount which the airline will keep come what may, then your question doesn't even arise.

A different question is whether this is a practice that ought to be prohibited. But that is, by definition, a different question.

You originally paid the airline a sum X for travel in a given class/service. That ammount X was based upon a fare from a variable tarrif and ammounts ammount to cover the tax and surcharges that would be payable.

However, assuming it was all disclaimered at the point of booking, I see no need for them to refund it at all. Afterall, you are paying the airline for travel, they are paying taxes and charges (if you happen to fly).

Why should the airline agree to the hastle/work of refunding you? You represent a lost inflight sales oportunity, etc. They are paying the tax, the total they asked you to pay was just built using that as a compenent.

I can give you a case based upon being nice, and hoepfully engendering future loyalty and increased speculative booking, but I can't give you any reason why they should HAVE to do so on a clearly non-referundable fare.

After all, they have in certain areas incurred higher costs from you than other pax!

So I book a Hotel room and its a special deal with no cancellations policy. I don't show can I have my VAT back please?

No is the answer - I appreciate that the circumstances are different but we all know how O'Leary works so he uses the no show money just like Hotels do to cover admin costs etc.

I don't like FR but they have a business model that works. Just be aware of what you get with them - nothing.

At the end of the day we FT'ers are savy enough to know that not all airlines are the same. Not all refund policies are the same either.

If FR were flaunting the law would they not be guilty of "undue enrichment"?

I agree with you here, but I am not speaking about VAT. Whatever VAT is being levied is included in the FARE. The taxes are BROKEN OUT separately as I showed in earlier posts in this same thread. Look at your own eTicket receipts. You'll see the taxes, surcharges, and fees all listed SEPARATELY from the FARE. Why is it so difficult for people to see this? I don't get it. After 8 years of staring at tariffs, taxes, and fees as a back-office airline employee, I think I am pretty knowledgable about this subject and can explain it to even the densest of people. Look at what we call a "fare calc" line. This is where the fare and all the taxes are broken down. If you study a fare calc line and see how the rules of the tariff apply to the FARE only and all the auxiliary stuff does not, then you'll perhaps understand my point.

Back to the VAT for a second. The taxes, fees, and surcharges I am referring to are CONSUMABLE TAXES, FEES, and SURCHARGES, not a VAT tax. Meaning, they are only PAID out by the airline to a vendor if I consume the service. If I land in the USA from overseas, there is a customs and immigrations fee. If I'm on the plane, the fee is paid by the airline to the US gov't. If I'm not on the plane, the fee is not paid by the airline. If the FARE is nonrefundable, that's certainly ok. They can keep the money. But, keeping that consumable fee payable to US customs and immigrations as profit is dishonest and, in my opinion, violates the law. At the time of purchase of the ticket, the INTENT of that money was to pay a tax. Intent is 9/10ths of the law.

As the guidance notes for APD make quite clear, it is payable by the airline/operator. Similarly, passenger services charges payable to the airports are paid by the airline.

Where do you see a compulsion on the airline to refund sums equivalent to that coming from?
They have charged you showing what they will pay to others.

Isnt timing, amongst other things, relevant here?

At what point in time is the carrier obligated by Her Majesty to collect APD from a passenger and what point in time is the carrier obliged to pay her Majesty that amount?

Is the carrier obliged by her Majesty to collect an expected amount of APD at the time either the passenger contracts with the carrier or passes money to the carrier? If not, the carrier could presumably collect the APD at any point prior to departure-or even hold a cap out as the passengers disembark an aircraft?


It seems from what has been said before on this thread, and without trawling through the law applying, that at least the obligation to pay APD is triggered by an act-the passenger travelling- and is not linked to the contractual consideration.

Isnt that the point-if it were part of the contractual consideration for the service expected to be delivered-then it shouldnt be separately "earmarked"?


Carriers wish to separate the APD from the contractual consideration-what makes this suddenly then part of the contractual consideration for the contract that is evidenced by the conditions of carriage?

Couldnt there be an argument that the carrier invites the passenger to pay that expected APD to the carrier in advance of an expected physical act-that being the passenger performs a flight. What is the carrier then doing with that money and how is it being held in the interim?

Is it possible, rather ,to argue that the carrier is holding that "APD expected payment" in some form of trust-on behalf of the passenger?

Perhaps the terms of that trust include the mention of an expected "administration charge" leviable by the trustee? Those terms might be found physically within the "conditions of carriage" but that is not part of the contract of carriage.

Maybe its that suggested trust-and its terms- that needs to be considered in the light of operable law-such as that found applying between any commercial entity and a consumer.

VAT is also separately broken out on a receipt, but you seem to accept the propriety of it being non-refundable, if that's what the contract says. So why must airline taxes be different?

(Indeed, I am not sure whether the VAT element of a non-refundable hotel room is payable to the government if the client does not actually stay at the hotel. If it isn't, then there really is no relevant distinction between VAT and and airline tax.)

I think that the difficulty arises because you're confusing two things. We can all see an amount that is separately broken out. But being broken out doesn't necessarily mean it's refundable.

I think we would all agree that it would be good if the APD etc was refundable even if the fare was non-refundable. Many of us would think that there's something shady about not refunding the APD, for exactly the reasons you mention.

But there's a difference between it being bad practice, or even dishonest, not to refund the APD; and it being illegal. Or, to put it another way, "the airline ought to be legally obliged to refund the APD" is different from "the airline is legally obliged to refund the APD". As things stand at present, the latter appears not to be true.

The difference is, in fact, encapsulated in your second paragraph, and it is important not to confuse the two propositions:-You may take the view that keeping the "consumable fee" is dishonest, but that does not mean that it violates the law. Only legislation can achieve that effect.

There is a big difference in that the VAT has to be paid to the government after being charged. The APD only becomes due if the passenger actually travels

But is that actually right?

Suppose I place an order with you for £100.00 worth of cakes, and you ask me to pre-pay you £117.50, being £100.00 net + £17.50 VAT. But before delivery, we agree to change my order to £100.00 worth of bread. As bread is zero-rated for VAT, you would issue me with a VAT invoice for £100.00 + £0.00 VAT, and you would be under no obligation to pay any VAT to the government.

But wouldnt you-prior to that- issue a credit note to the customer for the cakes ( including the VAT chargeable element)?

VAT is a sales tax. Tax liability arises at the time of sale even though actual payment may be later. OTOH, it is refundable if a sale is cancelled (eg: returned goods, etc...). So your example is a sale which is then cancelled and replaced by a new sale. So tax arises at the time of sale but a refund entitlement arises when the order is changed. If the two events are within the same billing cycle, they will cancel each other out. If they are in different billing cycles, then the VAT liability will be decreased when the order is changed.

This, however, is all pretty academic in relation to this discussion. APD liability, unlike VAT liability, does not arise at the time of sale/ticket issuance but at the time of consumption (bum on seat).
If airline tickets were subject to VAT, the VAT would remain due on a non-refundable ticket even if you don't fly. Not so with APD (or, for that matter, most other air taxes): if you don't fly, no tax is due.
Similarly, if you paid for your cake order and the order was non refundable and you did not collect the cakes, the seller would still have to pay VAT on it.

Not at all. In Italy, at least, all prices must include VAT (IVA in Italy) and are never listed separately. This goes for everything from groceries to furniture to airline tickets. The price is the price. The VAT is the responsibility of the vendor to pay to the gov't. It is of no concern to the buyer.

Second, the VAT is ONLY levied on the FARE. It is part of the fare. The difference being that regardless if I fly or not, the VAT is payable to the gov't on all purchases. If the fare is nonrefundable, the VAT is also nonrefundable. If the fare is refundable, then the VAT is also refunded because it is no longer revenue. However, there is no VAT on taxes. The airlines do not levy the taxes, the governments do. So the idea of "airline taxes" is moot. If I don't fly on a nonrefundable ticket, sure the government still gets the VAT because the airline will declare the revenue on their taxes. They'll be obligated to pay the VAT. However, the government taxes and fees are not taxable and do not get paid to the government, so they need to be returned to the passenger/buyer of the ticket.

FINALLY!! NickB, you are a god of accurate definitions! Thank you for your post. Excellent!