Treasury consulting on APD distance bands change; perhaps to 3 or 4 (just 2 now)
The Treasury has a current consultation on “Aviation Tax Reform.” Part of it is whether the level of Air Passenger Duty (APD) on domestic flights should be changed. Currently a passenger on a return domestic flight pays £13 x2 = £26, as they leave a UK airport twice. The cost is only £13 for a return flight to a European (under 2,000 miles) destination. They are also consulting about whether there should be more bands for APD for longer journeys. The government is aware that air travellers should pay more, if they fly further and thus cause the emission of more carbon. In 2008 it was decided there would be 4 distance bands with increasing APD costs; under 2,000 miles; 2,000 – 4,000; 4,000 to 6,000; and over 6,000. But in 2014 this was changed to just two bands, under and over 2,000 miles. The consultation asks if the bands should be changed; if they should revert to the 4 levels there were between 2008 and 2014; or if there should be a new system, with three bands. These would be under 2,000 miles; between 2,000 and 5,500 miles; and over 5,500 miles. There were some potential technical difficulties with very large countries – eg. the US or Russia – so only considering the capital city, to categorise the country, can be unfair. Consultation closes 15th June 2021.
Aviation Tax Reform consultation – ends 15th June 2021.
Chapter 4. International Distance Bands
4.1 The second part of this package focuses on reforms to APD that balance the government’s position on domestic flights with our environmental objectives, while maintaining the sector’s contribution to the public finances.
4.2 Aviation is currently responsible for 8% of the UK’s Greenhouse Gas Emissions. 18
(https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/957605/final-greenhousegas-emissions-tables-2019.xlsx ) Emissions from international aviation are responsible for the majority of the sector’s environmental impact, contributing 37MtCO2e in 2019, and have more than doubled since 1990. 19 (ibid)
The majority of the increase came in the 1990s and early 2000s, however emissions have also been increasing since 2012. 20 UK domestic aviation contributed 1.4 MtCO2e in 2019, representing less than 1% of UK Greenhouse Gas Emissions. 21
The aviation sector’s proportion of UK emissions is forecast to increase as we approach 2050, as other sectors decarbonise more quickly. The sector also contributes further negative externalities, including Nitrogen Oxide (NOx) and noise pollution.
4.3 As set out in paragraph 1.11, the government has put in place a wide range of initiatives to support the decarbonisation of the aviation industry and will be consulting on the overall strategy for the sector’s transition to net zero later this year.
4.4 This chapter sets out the government’s initial policy position that the number of international distance bands within APD should be increased. This would align APD more closely with our environmental objectives, and ensure that the overall proposed package of reforms balances our domestic connectivity and environmental goals, as well as maintaining the sector’s contribution to the public finances and our public services. The chapter also seeks views on the potential options through which this could be achieved.
4.5 Prior to COVID-19, the majority of the aviation sector’s Greenhouse Gas Emissions came from international aviation, as these account for the majority As set out in the below table, (see link for table) long-haul flights are responsible for a greater amount of emissions on a per flight basis, as they cover longer distances.
4.6 APD is currently structured under two distance bands: a short-haul band, where the distance from London to the destination country’s capital city is between 0 to 2,000 miles; and a long-haul band, where the distance from London to the destination country’s capital city is over 2,000 miles. Distance based bands generally reflect airline coding systems, which are based on countries. Distance to a country’s capital city is used as a straightforward proxy for distance to that country, making it as easy as possible to administer the tax – as well as improving transparency for the end consumer. This distance band structure means that those who travel furthest incur a greater tax liability.
4.7 The government’s initial policy position is that an increase in the number of international APD distance bands would align APD more closely with our environmental objectives. This would reinforce the “polluter pays principle”, by ensuring that those who travel furthest internationally, and consequently have the greatest impact on the environment, incur the most APD. This also ensures that the overall proposed package of reforms balances our domestic connectivity and environmental goals, as well as maintaining the sector’s contribution to the public finances.
4.8 There are two potential policy options through which this could be achieved. The government could either revert to a four distance band structure, in line with that previously introduced in 2008, or introduce a new banding structure.
Policy Option A: revert to the 2008 distance band structure
4.9 One possible approach to increasing the number of international distance bands would be to introduce the four-distance band structure that was announced in 2008, with the distance bands set at 0-2,000 miles; 2,000- 4,000 miles, 4,000-6,000 miles and 6,000 miles plus, from London respectively. This structure would apply to all states with the exception of the Russian Federation, which would be split east and west of the Urals.23
4.10 The government considers that the distances at which these distance bands are set would better support the government’s environmental objectives than the current two band structure, by strengthening the principle that those that fly further incur a higher rate of APD. We would expect airlines to easily incorporate this proposed distance band structure within their operating system, given that airlines have previously complied with the same distance band structure.
4.11 However, this structure previously posed some practical issues, notably between Bands B and C and also impacted on the UK’s international connectivity. In particular, the then government received several representations regarding concerns that the whole of the United States of America was included within Band B whereas the Caribbean was incorporated within Band C, because of the distance of their respective capitals. These factors led to decision in 2014 to revert to the two-band structure.
Policy Option B: design a new distance band structure
4.12 The alternative approach would be to design a new distance band structure, different to that introduced in 2008. The government could seek to introduce three international distance bands at the following distances: 0- 2,000 miles; 2,000-5,500 miles; and 5,500 miles plus. As with the current two-band structure, the Russian Federation would be split east and west of the Urals.
4.13 As with option A, the government considers that, by increasing the number of distance bands from the current two band structure, this option would better support the government’s environmental objectives by strengthening the principle that those that fly further incur a higher rate of APD. However, a three band structure may be considered to better align with the government’s objective to ensure APD supports international connectivity, as it would reduce the number of destinations that were subject to differential APD treatment (compared to option A).
See document (p 20 – 21)for graphics etc at
Questions on the International distance bands
19. Do you agree with the government’s initial policy position that the number of APD distance bands should be increased? In your view, what would be the positive and negative effects of such a change, particularly in light of the government’s objectives for aviation tax?
20. What could the impact on the environment of a change to the banding structure? How could any negative environmental impacts be mitigated?
21. What evidence can you provide about the impact of an increase in the number of APD distance bands on international connectivity?
22. Which of the policy options for increasing the number of international distance bands do you think is most appropriate? Please explain your answer.
23. Is there an alternative banding structure that could better meet the government’s objectives as outlined in paragraph 1.1?
24. If a new international distance band structure were to be introduced, how quickly could airlines integrate it within their operating systems to allow them to them to provide evidence to HMRC on their APD liabilities?
Until 2015 there were 4 distance bands for APD.
And economy ticket would cost:
£13 for up to 2,000 miles.
£67 for 2,000 – 4,000 miles.
£83 for 4,000 – 6,000 miles.
£94 for over 6,000 miles.
From April 2020 an economy ticket would cost:
£13 for up to 2,000 miles
£80 for over 2,000 miles. (Rising to £82 after April 2021)
with higher rates for premium class travel.
Government advised to halve domestic APD and review distance bands for the tax
Boris Johnson is set to authorise a 50% cut in APD for domestic flights. Senior Whitehall sources say he will announce a review of the tax, which is the only tax on air tickets (on which no tax or VAT is paid). Currently APD is charged at £13 for any adult leaving a UK airport, so that is the cost for any return flight to anywhere in Europe. For domestic flights (for which there is usually a rail alternative) the tax is £26, so it is charged on leaving both airports. The review will also look at the case for increasing the number of international distance bands. Since 2015, there have only been two bands, one covering flights of up to 2,000 miles and the other those in excess of that. The plans to change APD will be put to a consultation, so it is unlikely to be introduced until 2022. The recommendations are part of a wider Union Connectivity Review by Sir Peter Hendy, the chairman of Network Rail, to be published on 10th March, proposing a new “UK Strategic Transport Network” to oversee British transport priorities. Critics say the 50% domestic APD cut — coming just days after fuel duty was frozen for the 10th consecutive year — and rail fare rises, further undermine ministers’ commitment to cutting carbon a target of net-zero carbon by 2050. Doug Parr, chief scientist for Greenpeace UK, said this would “continue our nonsensical trend of the higher the carbon, the lower the tax.”
APD to rise on long-haul only (>2,000 miles) from £80 to £82 from April 2021 – no change in short haul £13 APD
Air Passenger Duty (APD) – the UK duty on flights – is set to increase for flights of over 2,000 miles, in April 2021. The APD will rise from £80 now to £82, for a return flight – APD is only charged on departures. For premium class air tickets of over 2,000 miles, the APD will rise by £4 from £176 to £180. There will be no increase in APD for flights under 2,000 miles, which means any flight in Europe, which will continue to pay just £13 for a return trip (£26 premium class). The rate for long-haul private jet etc rises from £528 to £541. (The distance is measured from London to the capital city of the destination country.) This tiny APD rise is not doing to deter anyone flying. The increase come despite calls from the aviation industry to freeze or even scrap APD due to the problems the sector has because of the Covid pandemic. There have been many calls for APD on domestic return flights to be scrapped, (as the APD is £26, not the £13 for a European flight) but there is no mention of those in the government announcement. Perhaps the government appreciates that airlines take money out of the UK, and passengers to foreign leisure trips, o a far greater extent than they bring money in.
See more about APD at