“Fair Tax on Flying” – the aviation industry lobby group – is complaining about APD, yet again
Fair Tax on Flying is at it again. They are resurrecting their rather unsuccessful , and entirely self-serving, campaign last year, to lobby government to cut Air Passenger Duty. The campaign’s members are all airlines, airports, travel companies that make their money out of people flying, and the more passengers they get, the happier they are. There are the usual claims about how catastrophic the tax is for the UK economy, (£13 for a return flight to anywhere in Europe), rising to higher levels for longer flights. Their rather unsuccessful Facebook page is back in use. Bit like deja vu. They did just about the same thing last March, with little effect on the Chancellor. In effect, the aviation industry is under-taxed, even with APD. The industry pays no VAT and no fuel tax, unlike road vehicles. This huge subsidy (the benefits the aviation industry by around £8.5 billion per year in the UK) effectively distorts the travel market, and deprives the Exchequer of revenue needed for public services for UK citizens.
Click here for the real facts on APD, never mind the industry whinge.
Anti-APD group to step up lobbying campaign
An aviation lobby group is stepping up its campaign against Air Passenger Duty in the run-up to chancellor George Osborne’s budget on March 21.
The Fair Tax on Flying alliance, which is made up of trade bodies, airports and airlines, said it would increase its lobbying efforts in Parliament as well as commissioning new research to show the damage APD is doing to the UK economy.
The alliance, whose members include ABTA, Carlson Wagonlit, British Airways, BAA, Gatwick Airport, Virgin Atlantic and Manchester Airports Group, said it would also target consumers by launching a new website and online petition to allow them to support the anti-APD campaign.
Simon Buck, chief executive of BATA, which is also a member of the alliance, said: “We want to help cement the work we have already undertaken to raise consumer awareness about this issue and make a powerful and credible case to the Treasury to look afresh at APD and the damage it is doing to the economy.”
APD is scheduled to go up by 8% from April 1 despite protests from across the travel industry. Virgin Atlantic wrote to Osborne earlier this week to call for the scheduled rise to be scrapped.
Darren Caplan, chief executive of the Airport Operator’s Association, added: “Despite making a powerful case to the Treasury that APD should be frozen, it is very likely that the Chancellor will go ahead with an 8% APD rise in his Budget next month.
“We believe that the wider the group of interests represented in A Fair Tax on Flying campaign, the more effectively we can make our case to policy-makers. That’s why we are hoping to grow the size and influence of the campaign in 2012.”
The Fair Tax on Flying has a rather unsuccessful Facebook page, which is getting a couple of “likes” – about 13 so far. It is at http://www.facebook.com/afairtaxonflying
And here is just about the same thing, from last March:
Abta-led ‘Fair Tax on Flying’ alliance takes aim at APD
Abta is spearheading an unprecedented industry-wide alliance to lobby the government for a Fair Tax on Flying.
The bosses of British Airways, Tui Travel and Thomas Cook are among 25 of the biggest names in travel on a letter sent to chancellor George Osborne demanding no further rise in tax on aviation ahead of the Budget on March 23.
However, the battle won’t end there. The Fair Tax coalition foresees a lengthy campaign through this year and beyond to ensure ministers appreciate the value of tourism, and consumers understand the impact of Air Passenger Duty (APD) on holiday spending.
Abta chief executive Mark Tanzer said: “APD is having a damaging impact on outbound businesses and customers, and it is damaging the UK economy and inbound travel.”
The campaign will focus on lobbying the government for the next three weeks. That first phase will end with the Budget and be followed by an extended effort to reach consumers, including through high street agents.
Previous attempts to unite the industry on APD have been weakened by a divide between airlines, as some sought a switch to a Per Plane Duty (PPD) – led by easyJet and supported by Abta, Tui Travel and Thomas Cook – and others, led by BA and Virgin Atlantic, insisted a per-plane tax would be more damaging.
Now most have put aside their differences to demand no further rise in the overall tax on flying. The one major exception is easyJet, which retains hopes Osborne will signal a switch away from APD later this month. But Tanzer said: “We are in discussion with easyJet.”
The Abta chief told Travel Weekly: “The industry has not been good at taking a campaign like this forward in the past. But this coalition was straightforward to put together because we agree the important thing is the quantum level of tax.
“APD is affecting an industry the government says is strategically important. This is not just the industry moaning about tax.
“Economically, APD makes no sense. It flies in the face of what the government says it is trying to achieve.”
He added: “We know the government is in a tax hole. But the only way out is growth. It is political madness to damage aviation.”
Tanzer insisted: “I’m confident of getting our message across and the government taking it onboard. The government says it has a programme to grow UK tourism and the tax structure will not do that. It is inconsistent with what the Treasury wants to do.”
The coalition includes airlines BMI, Monarch, Virgin Atlantic and Jet2, retailers The Co-operative Travel and lastminute.com, airport operator BAA, Gatwick airport and the Airport Operators’ Association, airline groups BAR UK and BATA, destination bodies Antor and the Caribbean Council, and UK tourism organisations the Tourism Alliance and UKinbound.
Its members demand the Treasury apply five tests of fairness to its policy on aviation tax.
The real facts about Air Passenger Duty:
APD distance bands APD £ per passenger from 1 April 2012
(old rates from 1.11.2010)
Miles from UK Reduced rate Standard rate *
in lowest class of travel in other than lowest
class of travel
Band A (0-2000) £13 (£12) £26 (£24)
Band B (2001-4000) £65 (£60) £130 (£120)
Band C (4001-6000) £81 (£75) £162 (£150)
Band D (over 6000) £92 (£85) £184 (£174)
* premium classes, business class, first class etc
Air Passenger Duty (APD)
In 2010/11 the exemption from fuel tax and VAT was worth more than £11 billion to the airlines. After deducting APD revenues, the net benefit is around £9 billion – equivalent to a subsidy to the airlines of about £360 per household. The 53% of the UK population who do not fly – mainly the less affluent – find themselves subsidising the aviation industry. (Details)
The rates of APD change on 1st April 2012, when the rates rise by around 8% – in line with inflation, taking into account the fact there was no rise in 2011. The tax take is likely to be around £2.5 billion, rather than £2 billion per year after the rise. That means the net benefit to the industry of its exemption from VAT and fuel duty will be around £8.5 billion, after April 2012.
The Treasury has reiterated that APD is not an environmental tax. It was instituted in order to – in a small way – compensate for the aviation industry’s non-payment of fuel duty and VAT.
Details on APD compared to the benefits gained by the aviation industry by not paying fuel duty and VAT:
(Details – letter dated November 2011)
Comparing costs of motoring compared to flying:
• Motorists pay 61p a litre duty on their fuel. Airlines pay nil. (see link )
• Motorists pay a further 20% VAT on their fuel. Airlines pay nil.
• Motorists pay 20% VAT to have their car serviced. Airlines pay nil.
• Motorists pay 20% VAT to buy their car. Airlines pay no tax on new aircraft.
So as the aviation industry pays no duty and no VAT, there is Air Passenger Duty instead.
This tax is charged at only £12 (£13 from 1.4.2012) per passenger for any short haul flight (under 2,000 miles) departing from a UK airport. Not on return trips. £13 on a holiday trip to anywhere in Europe does not seem a lot. The price of one or two main course in a restaurant? or 3 or 4 cups of coffee?
Higher rates of APD apply to longer flights. The APD rates (Nov 2011 – slightly higher from April 2012, see above) are:
Distance to capital city from London Economy / Premium After 1.4.2012
Band A (less than 2000 m) £12 / £24 £13 / £26
Band B (2001m – 4000m) £60 / £120 £65 / £120
Band C (4001m – 6000m) £75 / £150 £81 / £150
Band D (6001m+) £85 / £170 £92 / £174
The Treasury says: APD is an excise duty which is charged on the carriage, from a UK airport, of chargeable passengers on chargeable aircraft. Details
Information on APD on Wikipedia, including old rates, at http://en.wikipedia.org/wiki/Air_Passenger_Duty