APD: UK 4 – Germany 1

The UK beats Germany……..at the amount it taxes air passengers

With the last Budget of this Coalition Government exactly one month away, new analysis by the British Air Transport Association proves that the UK has the highest tax on flying in Europe by a huge margin.

Passengers paid over €4billion (£3.14 billion) in Air Passenger Duty (APD) in 2014, compared with just €1 billion (£745 million) raised by Germany’s equivalent Aviation Tax.

Germany has the second highest air passenger tax in Europe, but it raises £2.4 billion less than UK APD, despite Britons having few alternative options to flying for international travel, whereas Germany shares a land border with nine other countries.

The UK and Germany are just two of a handful of European countries to levy an air passenger duty, and in recent years many countries have abolished their equivalent taxes to become more competitive. For example:

• Ireland abolished their air travel tax in 2014;
• the Netherlands abolished their air passenger ticket tax in July 2009;
• Belgium abolished its air travel tax in 2008; and
• Denmark phased out its air passenger tax in 2006-07.

Those EU countries that do levy an equivalent tax (such as France, Austria and Italy) have much lower rates and raise significantly less revenue than APD.

Official forecasts suggest that the gap between UK APD and the German Aviation Tax will increase significantly over the next 5 years, partly because the UK Government chooses to increase APD rates by inflation each year. The UK Office for Budget Responsibility estimates that APD will raise £3.8bn (€5.1 billion) by 2019/20 – an increase of £600m from today’s level. In contrast, revenue from the German tax is forecast to increase by just £23 million to £768 million (€1.03 billion) by 2019.

Commenting on the findings, Nathan Stower, Chief Executive of the British Air Transport Association (BATA), said:

“Why should Brits pay so much more tax to fly for business, to visit family and friends or go on holiday than the Germans, or everyone else in Europe for that matter? Recent reforms to APD are steps in the right direction, but the next Government should finish the job, follow the lead of the Irish, the Dutch and others, and abolish APD in the next Parliament.”

The main cause of the difference in revenue is the difference in the amount of tax that passengers have to pay in the two countries. In the UK passengers pay £13 to fly economy within the EU (£26 for a domestic return flight), whereas passengers flying within the EU from Germany pay just £5.70 (€7.50). Passengers flying long-haul in economy from UK airports have to pay £71, compared to just £32.10 (€42.18) in Germany.

Passengers in Scotland may soon be paying German-levels of APD because the draft legislation implementing the Smith Commission recommendations includes the devolution of powers over APD to Scotland. The Scottish Government is committed to halving APD, leading to full abolition, and has called for this devolution to take place as soon as possible. Speaking at BATA’s annual dinner on 28 January, Alex Salmond confirmed that Scotland would cut APD and labelled the tax “a millstone around the neck of this industry and of the Scottish economy.”

ENDS

18th February 2015

Scrap flight tax to protect all passengers from impact of devolution urge UK airlines

Airline industry unites to call for Air Passenger Duty to be abolished across the UK in the next Parliament

UK airlines are putting their differences aside to call for Air Passenger Duty (APD) to be abolished across the UK during the next Parliament. Nathan Stower, Chief Executive of the British Air Transport Association (BATA – the trade body for UK airlines), will tell industry leaders and politicians gathered in London tonight that growing public and political concern, combined with forthcoming devolution of powers over APD to Scotland, presents a new and unique opportunity to secure abolition.

At the UK airline industry’s annual dinner, BATA will describe recent reforms that abolish the two highest long-haul bands and exempt children from paying APD as ‘positive steps in right direction’, but will call for the final destination to be abolition. Nathan Stower will say:

“The UK still has the highest tax on flying in the world by some margin. The next Government should finish the job, put this damaging tax on trade, tourism, families and businesses out of its misery, and abolish APD in the next Parliament.”

With keynote speaker and Former First Minister of Scotland Alex Salmond MSP in attendance, BATA will welcome the Scottish Government’s commitment to act on APD when they receive the necessary powers.

Citing Northern Ireland and the Netherlands as examples, BATA will highlight how passengers are prepared to travel across land borders to take advantage of differences in flight taxes. The UK Government was forced to significantly reduce APD on long-haul flights in Northern Ireland during this Parliament, followed swiftly by full devolution, to stem the flow of passengers travelling south to Dublin to take advantage of Ireland’s nominal equivalent tax. The UK and Scottish governments will be urged to learn from the Northern Ireland experience. BATA will say:

“BATA members respect the decision to devolve APD to Scotland and agree that the tax is damaging to families and businesses in Scotland, as it is in the rest of the UK. We welcome the Scottish Government’s commitment to halving APD with a view to abolition, but urge that full abolition be achieved by both the Scottish and UK governments in the next Parliament to prevent unfairness for passengers across the UK and to avoid market distortions.”

Supporting the campaign, Carolyn McCall, easyJet CEO said:

“APD is tax on passengers and has a proven, negative impact on UK tourism, investment and business activity. That is why we are working with other UK airlines to abolish the tax.

“Abolishing APD would boost the UK economy and pay for itself by increasing revenues from other sources. Research by PwC has revealed that the GDP boost to the UK economy would amount to at least £16 billion in the first three years and result in almost 60,000 extra jobs in the UK over the longer term.”

David Burling, Managing Director for Thomson and First Choice, said:

“We wholeheartedly support the call for the full abolition of APD. The devolution of the power to levy APD to the Scottish Parliament may result in the sensible removal or reduction of this tax north of the border. Whilst we would of course support this for our Scottish customers, it would be unacceptable to have different rates of APD across the UK and  therefore, if this scenario emerged, we would  strongly urge the UK government to enforce consistent rates across the country to lessen the impact for customers travelling from  other regional airports.”

The abolition of APD will be one of five policy proposals contained in a new manifesto produced by BATA to be published in March. The manifesto will set out the economic and social benefits generated by UK airlines and will propose five policy areas where Government action would enable the sector to deliver even more in the next Parliament.

ENDS

28th January 2015

Alex Salmond MSP confirmed as speaker at BATA Annual Dinner

Alex Salmond MSP, the former First Minister of Scotland, will be the guest speaker at the annual dinner of the British Air Transport Association (BATA) on 28 January.

Nathan Stower, Chief Executive of BATA, commented:

“We are delighted to attract such a high profile and entertaining speaker to our annual dinner, especially one who recognises the importance of aviation to both the economy and society. I can’t wait to hear what Alex Salmond has to say given our dinner takes place just a few days after the publication of the draft legislation that will devolve Air Passenger Duty to Scotland, and less than a week before the final Airports Commission consultation closes.

“With the General Election campaign well and truly underway and the distinct possibility that the parties’ fortunes in Scotland could be crucial in deciding the makeup of the new Westminster Government, Mr Salmond’s speech and attendance at our dinner couldn’t happen at a more interesting time.

“Over 230 key figures from across the aviation industry are attending, including representatives from our member airlines. It’s great that this event, now in its fifteenth year, has become such a well-established highlight of the industry calendar. Some places are still available and can be booked by contacting the BATA Office on 0207 222 9494.”

ENDS

7th January 2015

Autumn Statement – Changes to Air Passenger Duty

Reacting to news in the Autumn Statement that Air Passenger Duty (APD) is to be abolished for children under 12 from May 2015 and for under 16s from 2016, Nathan Stower, Chief Executive of the British Air Transport Association, said:

“Abolishing APD for children flying economy is an early stocking filler for families who save hard for holidays and visits to friends and relatives that will also boost UK tourism. However, introducing the first change for children under 12 in May presents significant practical difficulties. The industry has always said that changes to APD should have at least a 12 month lead in time due to advance bookings.

“It also makes no sense for the UK to still have the highest tax on flying in the world. With devolution of APD proposed for Scotland, each party should use their manifesto to set out how they would put this seriously flawed and counterproductive tax out of its misery in the next Parliament.”

ENDS

3rd December 2014

BATA responds to Air Passenger Duty proposals for Scotland

Reacting to the Smith Commission’s recommendation that Air Passenger Duty (APD) be devolved to the Scottish Government, Nathan Stower, Chief Executive of the British Air Transport Association, said:

“We share the Scottish Government’s analysis that Air Passenger Duty – the world’s highest air passenger tax – acts as a barrier to trade, tourism and economic growth.  APD across the UK should be phased out as quickly as possible, because the damage caused by this tax doesn’t stop at the Scottish border.”

ENDS

27th November 2014

Britain deserves a break – call to scrap tax on family flights

CAMPAIGN CALLS FOR THE GOVERNMENT TO SCRAP THE TAX ON FAMILY FLIGHTS 

A campaign to scrap the tax on children’s flights launches today, as polling reveals that that the majority of the public think that it is time the Government make children under 12 exempt from Air Passenger Duty (APD)– and help support families in taking valuable holidays together. A ComRes poll commissioned by ‘A Fair Tax on Flying’ – a coalition of aviation, travel and tourism partners who are calling for children’s APD to be scrapped – found:

• More than four in five (83%) British adults say that hard working families deserve a decent holiday next summer after a difficult few years and over three quarters (78%) say an annual family holiday should be part of every child’s life.
• Three quarters (75%) of British adults say that it is unfair that British families pay a flight tax while families from other countries do not get charged.
• Two thirds (65%) of British adults say that children under 12 should be exempt from Air Passenger Duty in the same way that children are exempt from other taxes.

Scrap the Tax on Family Flights has launched a call for the government to scrap Air Passenger Duty (APD) on children’s flights, giving families the break they deserve by helping to make their annual holiday more affordable – and delivering a vital saving, as many household finances continue to be stretched Currently, children pay the same tax on their tickets as adults, despite there being a well-established principle that children are exempt from taxation, for example VAT on food and clothing.

The air tax paid by families in the UK is already the highest in the world, with APD adding £52 to the cost of a family of four’s economy class flights to destinations in Europe and £276 to economy class flights to destinations such as the US. This is a significant cost on families that strive to save for their holiday each year. Only four other European countries levy a similar tax, and UK passengers pay the most, and more than double the nearest (Germany). Even families planning a ‘staycation’ can be hit by this unfair tax if they take a domestic flight. In fact, because APD is a departure tax, if they take a domestic return flight they will be taxed twice.

Scrap the Tax on Family Flights is asking the public to join the campaign by using their online calculator to find out how much extra their holiday costs because of government tax. The calculator can send a postcard to Chancellor George Osborne urging him to scrap the tax on family flights. The campaign is already gaining political support with almost 30 MPs having signed a House of Commons Early Day Motion (455) calling for the tax to be abolished on children’s tickets.

A spokesperson for the campaign to Scrap the Tax on Family Flights, Dale Keller, said:

“The tax on children’s flights is a strain on family budgets. Given that the tax is levied at the highest rates in the world, this tax surely fails to meet the Government’s own ‘family test’. Scrapping Air Passenger Duty on children’s flights will help to make an annual holiday more affordable for hard working – and hard pressed – families, at a minimal cost to Government.

 ”We’re urging people to support the campaign by using the online APD calculator, and sharing how much extra they have to pay, because of this eye-wateringly high tax, with the Chancellor.”

 MP for North West Leicestershire Andrew Bridgen, primary sponsor of EDM 455, said:

“It’s important that hardworking families across the UK have the opportunity to enjoy a family holiday once a year, and scrapping the tax on children’s flights is a great way for the Government to help by making a holiday more affordable. 

“I am calling on the Government to scrap the tax on children’s flights and help families enjoy the well-earned break they deserve.”

MP for Altrincham and Sale West Graham Brady, Chairman of the 1922 Committee, said:

“It’s clearly unfair that British families have to pay the highest rate of Air Passenger Duty in the world, and that children are charged this tax. It’s not the children that pay for their tickets, it’s their parents or family members, so this is simply an additional strain on the family Budget.

“The Government should realise this doesn’t meet its own family test – and scrap this unnecessary tax on children’s flights as soon as possible. British families deserve a break.”

ENDS

24th November 2014

Labour proposals for a new charge on overseas visitors

Responding to the news that a Labour Government would introduce a new charge on visitors from countries that are not required to obtain a visa to enter the UK in order to fund 1,000 additional Border Force staff, Nathan Stower, Chief Executive of the British Air Transport Association (BATA), said:

“While we welcome the desire to improve the customer experience for passengers arriving at the UK border, airlines have significant concerns about this proposal.

“Visitors from countries like the USA and Australia already pay the highest air passenger tax in the world to fly to the UK – £71 from next April – contributing billions of pounds to the Treasury. Adding yet another charge will make the UK more uncompetitive in attracting tourists, businesses and inbound investment.

“It is not clear how this proposed charge would be collected. The vast majority of visitors from those countries that are not required to obtain a visa to enter the UK, such as the USA, do not currently provide information to UK authorities ahead of their visit. Furthermore, if more money were to be raised from airline passengers alone, it would only fair for this to fund improvements in the border at airports and not at other ports of entry such as Calais.”

ENDS

18th November 2014

BATA responds to Airports Commission

Responding to the Airports Commission’s consultation on its appraisal of the three shortlisted options, Nathan Stower, Chief Executive of the British Air Transport Association (BATA), said:

“The Airports Commission’s final recommendation must be cost effective, offer value for money, and not rely on today’s passengers paying for infrastructure that won’t be ready until at least the mid-2020s. UK airlines will study the appraisal of each option in detail to judge whether the plan is supported by a robust business case with realistic forecasts and a credible funding mechanism. I hope our politicians will wait for the results of this consultation and the Commission’s final report so that political decisions can be taken with the fullest evidence.”

ENDS

11th November 2014

BATA responds to Supreme Court air passenger compensation decision

Commenting on today’s Supreme Court decision to refuse applications to appeal decisions in two cases about the liability of airlines to pay compensation after travel delays, Nathan Stower, the Chief Executive of the body representing UK airlines, the British Air Transport Association (BATA), said:

“Today’s Supreme Court decision is both surprising and disappointing.  UK airlines support the principle of passenger protection and always meet their legal obligations. However, the rules should be clear, affordable and proportionate for the sake of passengers and airlines. The current system fails those tests and this decision will further increase costs which ultimately are borne by all passengers.

“Vital reform of the EU regulation has recently stalled in Brussels due to disagreements between the Spanish and UK governments over Gibraltar. These differences must now be urgently resolved to allow the necessary reforms to proceed.”

ENDS

31st October 2014

Air passengers taxed over £27 billion in inflation busting 20 years of APD

Industry Campaign renews call for urgent review and reduction of ‘damaging’ tax ahead of 2015

This Saturday, 1 November, marks 20 years since Air Passenger Duty (APD) was first levied on passengers flying from UK airports, and the A Fair Tax on Flying campaign today reveals the Government’s staggering £27.035 billion tax take over this period.

This figure comes amidst new research that a family of four taking one holiday a year in Europe, with an occasional trip to a longer haul destination such as the US every fifth year, would have paid an inflation-busting £1,244 in the life of this punishing tax.

APD was introduced by then Chancellor of the Exchequer, Kenneth Clarke, in the 1993 Budget, and it was levied from the following November at £5 for flights within the EEA and £10 elsewhere. The tax (which is paid by nearly all passengers flying from UK airports) has since risen dramatically, at around four times the rate of inflation over the same period for short haul and at a whopping twenty times the rate of inflation for long haul – and now APD is the highest tax of its kind anywhere in the world.

Presenting  a ‘nice little earner’ for successive Governments since 1994, it is predicted that APD will bring in around £3.2billion in 2014/2015 – putting it firmly amongst the top yielding stealth taxes, despite recent positive reforms to the tax on long haul flights.

The A Fair Tax on Flying campaign is renewing its calls for the Government to undertake an urgent review and reduction of the duty ahead of next year’s General Election.

1. Damaging for business and the UK economy – a more competitive APD rate would help the UK win global race, say industry leaders

Industry leaders in business, tourism, and aviation who make up the campaign have argued that APD makes goods and services more expensive, while discouraging investment, inbound tourism, and growth, all the while leaving the UK less competitive.

2. Hits consumers hard – APD defies Government’s own ‘family test’ 

As well pushing up the cost of business travel through the UK, APD also makes foreign travel less affordable for holidaymakers, especially for families, who receive no tax ‘break’ on children’s  flights, as for other goods and services.

An estimated £1 billion of last year’s £3 billion APD coffers were raised by leisure travellers. With a family of four now paying on average £52 in taxes for short-haul flights and £276 on long-haul flights to a favourite destination such as Florida, or £340 to destinations such as Jamaica, India and Pakistan which are important for diaspora communities visiting friends and relatives, the campaign is arguing that the tax is out of step with the Government’s own family test.

Consumers agree – with research by ABTA in summer 2014 showing that 4 in 10 consumers now say high levels of APD have put them off flying, while 3 in 10 would consider flying from other airports outside the UK to avoid the tax.

3. UK is out of step – other countries are reducing or reforming the tax whilst ours creeps up

Out of 28 EU countries, only four others levy some form of air passenger tax. Critically, those flying from UK airports pay as much as 5 times the amount in departure duties than if they flew from competing airports in Germany, France, Italy and Austria.

Belgium, Denmark, Holland, Malta, and Norway have all scrapped their APD equivalent taxes in recent years, and Germany has frozen theirs. And so the campaign is calling on the UK to bring the policy in line with our neighbours and competitors in Europe.

4. Twenty years on, ‘A Fair Tax on Flying’ campaigners say urgent review and reduction should be a priority

Mark Tanzer, Chief Executive of ABTA – the Travel Association, said:  “After 20 years, APD seems to have become entrenched in the revenue-raising arsenal of the Treasury, yet it fails to meet so many of the Government’s own aims, both to support families and build our economy. For the sake of vital jobs, growth and the very valuable investment families make into visiting friends and relatives, a serious look at reforming and reducing this unpopular and harmful tax is now needed more than ever.”

Darren Caplan, Chief Executive of the Airport Operators Association, said: “Two decades is a long time for such an eye-wateringly high and regressive tax to be in place, and the huge Treasury revenues revealed today give a clear indication of why the Government is reticent of challenging the status quo. We believe this is short sighted: air passenger taxes, like APD, are proven to harm national economies, and the Government now needs to get us in step with our competitors, to boost jobs, growth and UK connectivity.”

Dale Keller, Chief Executive of BAR-UK, said:  “We are confident that a Treasury led review of APD would confirm the damage being done to our economy and the UK’s global competitiveness. We believe that an urgent re-examination will reveal the very real opportunity to raise more revenues in the longer term through stimulating the economy. In light of 20 years that the duty has grown disproportionately and inhibited growth, we urge the Chancellor to do more to support business and ordinary consumers and reform the tax.”

Nathan Stower, Chief Executive of BATA, said:   “It is a scandal that an island trading nation like the UK still has the world’s highest tax on flying despite recent positive changes to long-haul rates. Few countries have followed the UK’s example in taxing air passengers and policymakers should stop and consider why. Countries such as the Netherlands and Ireland have abolished their equivalent taxes having recognised their damaging economic impact.”

ENDS