Buyers downbeat over impact of air passenger duty

8 November 2012

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8 November 2012 | Anna Reynolds

Travel buyers believe UK air passenger duty (APD) is “out of kilter” with the rest of the EU and serves as a direct revenue source for the government.

In a roundtable at the World Travel Market (WTM) event in London this week, purchasers also said from a corporate perspective the tax was simply seen as a cost of doing business, and if removed they would expect it to be replaced with another duty.

APD is a tax charged on all passengers departing a UK airport which rose by 8 per cent in April this year. The standard rate for someone travelling to Europe is £26.

But buyers said lifting APD could mean more business travel for the UK. A purchaser told SM: “At the moment lots of my buyers don’t use the UK route because it is too expensive.”

The majority opinion was although APD was introduced as a green tax, it instead has simply turned into another revenue stream for the government.

The comments follow a debate in the House of Commons where MPs urged the Treasury to carry out a “comprehensive study” into the economic impact of APD. Conservative MP Priti Patel said APD “acts as a barrier to economic growth” deterring inward investment.

She added APD was harming British businesses wishing to export and take up business opportunities overseas, noting “the current air passenger duty regime is the highest air passenger tax in the world, which makes the UK less competitive than countries with lower aviation taxes”.

Further, the Fair Tax on Flying campaign has secured the support of 200,000 members of the public who are also pushing the government to hold a review.

But despite this, buyers said they would be surprised if APD were to be lifted, considering the current economic climate.

Calls for a review come ahead of the autumn statement and 2013 budget forecasts, which will be released on 5 December. SM is awaiting a response from the Treasury.

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