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Autumn Budget: APD

Boost for domestic flights with 50% cut in APD

Edinburgh airport Easyjet

Boost: domestic flights (pic: Terry Murden)

The UK government is to cut Air Passenger Duty (APD) for domestic flights from April 2023 but long-haul taxes are to rise.

The plans, unveiled by Chancellor Rishi Sunak in his Autumn Budget, will see a 50% reduction in APD for flights between airports in England, Scotland, Wales and Northern Ireland in 2023/24.

Under the new arrangement, passengers will pay £7.50 for each flight rather than the current £13.

However, a new rate of £91 for economy seats will be introduced for ultra-long-haul flights of 5,500 miles or more, which Mr Sunak said will help Westminster achieve its carbon emissions reduction goals because “most emissions come from international rather than domestic aviation”.

The current rate of APD for long-haul destinations (more than 2,000 miles) is £82 in economy for 2021/22. From April 2022 this will increase to £84.

Mr Sunak said less than 5% of passengers will end up paying more APD but that “those who fly furthest will pay the most”.

He added: “Right now people pay more for return flights between the four nations of the United Kingdom than they do when flying home from abroad.

“This will help cut the costs of living, with nine million passengers seeing their duty cut by half. It will bring people together across the United Kingdom.”

It was not clear how the new charging regime would apply in Scotland where air passenger duty is due to be a devolved matter and is known as air departure tax.

There is also likely to be some negative feedback to the Chancellor’s announcement from climate campaigners ahead of the COP26 summit in Glasgow this weekend.

Joanne Dooey, president of the Scottish Passenger Agents’ Association, welcomed the reduction in domestic APD, but said: “The increase in long haul APD which will come into effect at the same time won’t help Scotland’s economic recovery.

“This planned increase is disappointing not only for the travel industry but for Scottish businesses.

“We hope the tax raised by this increase will be ring fenced to support developments in sustainable fuels and other measures to move towards net zero.”

Scottish Tourism Alliance chief executive Marc Crothall said: “The measures outlined by the Chancellor today will be welcomed across many sectors within Scotland’s tourism industry, particularly the move to cut APD on flights between UK airports; this marks a hugely positive step forward for the recovery of our travel and aviation sector.”=

Joanne Walker, technical officer for the Chartered Institute for Taxation, said the tax change has implications for Scottish policy.

“Cutting aviation taxes to boost connectivity used to be the policy of the Scottish Government, but this changed in 2019,” she said.

“We need clarity from UK and Scottish ministers over how and when the issues that have prevented APD from being devolved to Holyrood will be resolved, as well as how the tax will operate in Scotland once it has been devolved and whether the reduced rate announced today would continue.

“This is arguably more urgent given that today’s announcement entrenches apparent differences in policy between the two governments.

“Doing so would give those responsible for administering and collecting the tax certainty over the levels of tax that will be due in Scotland once it has been devolved and allow them to plan ahead with greater certainty.

“It is also difficult to see how cutting APD rates for domestic flights is in keeping with the UK’s climate ambitions, particularly when there are other forms of transport available for most domestic travel”.



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