CHANCELLOR George Osborne had good news for air passengers travelling between the UK and south Asian countries as he announced changes to Air Passenger Duty while presenting the annual budget this afternoon (19).
APD is calculated by measuring the distance between London and the final destination’s capital. There are four bands – band A (flights under 2,000 miles), B (between 2,001 and 4,000 miles), C (4,001 and 6,000), and D (more than 6,000 miles).
Osborne told MPs: “We will also reform Air Passenger Duty to end the crazy system where you pay less tax travelling to Hawaii than you do travelling to China or India.
“It hits exports, puts off tourists and creates a great sense of injustice among our Caribbean and South Asian communities here in Britain.
“From next year, all long haul flights will carry the same, lower, band B tax rate that you now pay to fly to the United States.”
Under the revised duty, from April 1, tax on long-haul flights between 4,001 and 6,000 miles will be reduced by £14 per person, with those travelling more than 6,000 miles will see a reduction of £26.
A spokesperson for British Airways, which flies to New Delhi, Mumbai, Bangalore, Hyderabad and Chennai, said: “This is window dressing a tax that even George Osborne says is 'crazy'.
“It still punishes families and costs UK jobs. The only long-term solution is to scrap APD in its entirety and allow the aviation and tourism industries to flourish, to the benefit of the wider UK economy.
“APD remains the highest aviation tax levied in the world.”
However, Virgin Atlantic said: “A two band APD rate is a very welcome simplification to remove some of the biggest distortions of the current system which the Chancellor himself admitted is crazy and unjust. The Government has rightly recognised the damage APD is having on exporters and the travelling public alike.
“A tax system which penalised high growth emerging economies such as China and India was always contrary to the Government’s stated policy on trade and exports, so this is a positive step that recognises the impact of this economically damaging tax.
“There is a growing body of evidence demonstrating the huge economic benefits to the UK of reducing or abolishing APD and we hope that the Government will continue to go further in the long run.”
