UK Business class airfare duty could rise - Telegraph
Mar 3, 2024, 11:57 pm
#1
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UK Business class airfare duty could rise - Telegraph
The Telegraph are reporting that the UK government could raise APD on J flights to pay for possible tax cuts:
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https://www.telegraph.co.uk/politics...hunt-tax-cuts/
Jeremy Hunt is considering an increase in business class air fares as part of a series of measures targeting the wealthy to fund a tax cut in this week’s Budget.
One proposal under discussion is increasing air passenger duty for those in business class, potentially raising hundreds of millions of pounds.
Last night, it was not known which cuts and tax rises had been chosen to go forward into Wednesday’s Budget.
Air passenger duty is split into three categories: a reduced level for economy, a standard level for business class and a higher level for private jets.
For those in business class, the charge is £13 for domestic flights, £26 for up to 2,000 miles, £191 for up to 5,500 miles and £200 over that.
Altogether, it raises £3.8 billion a year, so an increase could potentially bring in hundreds of millions more.
But last year, Ryanair said that UK airports were already at a disadvantage because Britain is the only country to have such a tax.
If the Chancellor does go ahead with the increase, it would break a pledge to the airline industry in September not to impose any new taxes to discourage flying.
A leading industry source said: “It’s certainly against the spirit of the promise No 10 made in September not to put up taxes on air travel and has come out of the blue when all the discussion with the Government has been about working together to decarbonise aviation.
One proposal under discussion is increasing air passenger duty for those in business class, potentially raising hundreds of millions of pounds.
Last night, it was not known which cuts and tax rises had been chosen to go forward into Wednesday’s Budget.
Air passenger duty is split into three categories: a reduced level for economy, a standard level for business class and a higher level for private jets.
For those in business class, the charge is £13 for domestic flights, £26 for up to 2,000 miles, £191 for up to 5,500 miles and £200 over that.
Altogether, it raises £3.8 billion a year, so an increase could potentially bring in hundreds of millions more.
But last year, Ryanair said that UK airports were already at a disadvantage because Britain is the only country to have such a tax.
If the Chancellor does go ahead with the increase, it would break a pledge to the airline industry in September not to impose any new taxes to discourage flying.
A leading industry source said: “It’s certainly against the spirit of the promise No 10 made in September not to put up taxes on air travel and has come out of the blue when all the discussion with the Government has been about working together to decarbonise aviation.
https://www.telegraph.co.uk/politics...hunt-tax-cuts/
Mar 4, 2024, 12:51 am
#4
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Mar 4, 2024, 1:06 am
#5
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If I were in HM Treasury I would be looking at IAG's profit, targeting the tax on LHR, and bringing transit passengers in to the scope of it. It's difficult to argue that privileging foreign passengers over UK ones on congested national infrastructure which creates noise over central London is good public policy.
Mar 4, 2024, 1:20 am
#6
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If I were in HM Treasury I would be looking at IAG's profit, targeting the tax on LHR, and bringing transit passengers in to the scope of it. It's difficult to argue that privileging foreign passengers over UK ones on congested national infrastructure which creates noise over central London is good public policy.
Anyway, I wouldn't have minded another tax hike if it meant investing the output in, say, improving NATS or some other bit of the national infrastructure that is crumbling, but funding a tax cut feels exceedingly self-serving.
Mar 4, 2024, 1:41 am
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Even before NATS were made a Public-Private Partnership in 2001 it would return a profit to the Treasury. PPP meant that NATS itself borrowed £735m which it immediately to the government, and repayed the loan over the following twenty years. I'd estimate that it's been over half a century since the UK government gave NATS any money, sadly I can't see it ever happening unless something even worse (in terms of impact on aviation) than Covid happens.
Mar 4, 2024, 1:50 am
#8
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Flying is an exceptionally easy target for this sort of thing, unfortunately. Impacts a small percentage of the population, Hunt can badge it as hitting the wealthy and also hitting a polluting industry.
Meanwhile in reality, the amount raised will be chicken feed in the context of funding a tax 'cut' for a direct tax like NI. It's all rumours, but I wouldn't be surprised to see a lot of things like this put up so the Chancellor can grab himself a headline.
Meanwhile in reality, the amount raised will be chicken feed in the context of funding a tax 'cut' for a direct tax like NI. It's all rumours, but I wouldn't be surprised to see a lot of things like this put up so the Chancellor can grab himself a headline.
Mar 4, 2024, 3:18 am
#9
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Doesn't appear to put people off though, does it? I'm looking at some trips this summer and hotel prices are coming in at almost 2x they were last summer - demand is through the roof. There's a lot of people with a lot of spare money in this world.
Whenever I travel in J, it's nearly always a full cabin. When demand is so high, sadly it's all-too-easy to raise tax.
Whenever I travel in J, it's nearly always a full cabin. When demand is so high, sadly it's all-too-easy to raise tax.
Mar 4, 2024, 3:36 am
#10
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It's no more cynical an idea than Seville charging for access to Plaza de Espana or Macron doubling the tourist tax in Paris to help pay for hosting the Olympics. Or any other place that charges a tourist tax such as Venice, Amsterdam or the Canaries.
Mar 4, 2024, 4:38 am
#11
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Given the enduring popularity of the more luxury cabins, it probably isn't high enough.
Increasing APD on business class is the easiest of open goals for a politician. It's a luxury tax on the wealthy- most people can't afford to travel business- AND it can be spun as green.
Increasing APD on business class is the easiest of open goals for a politician. It's a luxury tax on the wealthy- most people can't afford to travel business- AND it can be spun as green.
Mar 4, 2024, 5:09 am
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