Treasury Aviation Taxation consultation – some responses
The Treasury recently held a consultation on aviation tax reform. It closed on 15th June. The consultation proposed reducing or removing Air Passenger Duty (APD) on domestic flights. It is currently £26 on a return domestic flight, £13 for each part departing from a UK airport (it is only £13 for a return flight to Europe). It also asked about changing the APD on longer flights. Currently any flight to a destination over 2,000 miles away pays £82 APD. The consultation has options for making more long haul bands. The Aviation Environment Federation (AEF) has responded in detail, as have Hacan, Stansted Airport Watch (SAW) and the Aviation Communities Forum (ACF). AEF said it “expresses opposition to any reduction in taxes for an already under-taxed industry. For an industry which pays no fuel duty or VAT on tickets, APD is already too low to ensure that airlines make a fair contribution to public finances. Government should be looking at tax increases, not decreases, we argue, particularly given that flights are disproportionately taken by people on higher incomes.” There are arguments both ways, but most environmental organisations think there should be more long-distance bands, with higher rates for longer distances.
Aviation Tax Reform consultation – ended 15th June 2021.
CUTTING TAX ON DOMESTIC ROUTES WHICH HAVE REASONABLE LOWER CARBON ALTERNATIVES SENDS THE WRONG MESSAGE ON CLIMATE
16th June, 2021 (The Aviation Environment Federation – AEF)
AEF has responded to the government consultation on aviation tax reform which closed on Monday 14th June. The consultation primarily focused on the Government’s proposal to reduce air passenger duty (APD) rates on domestic routes. It was implied – but not stated – that any losses would be balanced out with increased costs on some international routes.
AEF expresses opposition to any reduction in taxes for an already under-taxed industry. For an industry which pays no fuel duty or VAT on tickets, APD is already too low to ensure that airlines make a fair contribution to public finances. Government should be looking at tax increases, not decreases, we argue, particularly given that flights are disproportionately taken by people on higher incomes.
Whilst we acknowledge that domestic aviation is responsible for only a small proportion of total aviation emissions, AEF highlights that lowering APD on domestic routes signals that the Government is not taking the climate crisis seriously. It gives the wrong public message when there is a unique window of opportunity for the Government to influence behaviour post-pandemic, and in the run up to the UK hosting the UN Climate Change Conference COP26 later this year. Such cuts should not be considered, we argue, in the absence of the Government’s net zero aviation policy consultation, which is yet to be published.
We also express concern about the local environmental impacts, including noise and air pollution. This could increase as a result of encouraging people to fly domestically through lower taxes. Domestic flights will also overfly more people per kilometre flown than international flights, we highlight.
Alternatives to lowering APD that could help address the Government’s concern about differential treatment for flights between the UK and Belfast compared with flights to Dublin, AEF suggests, could include:
- Retaining the current rate for all domestic journeys but increasing it for international routes;
- Retaining the current rate for all domestic journeys that cannot feasibly be made by rail (e.g. if the rail journey can be made in a given time limit) but increasing it for international routes;
- Retaining the current rate for domestic journeys, but providing relief from other taxes such as future carbon charges for domestic air journeys powered by renewable energy.
Since the primary purpose of APD is to help ensure that the industry contributes to public finances, the Government should consider options for carbon charging, in addition to APD, our response concludes. Such charges could include: a new charge to allow Government to invest in carbon removal technologies; a levy to close the gap between the level of carbon pricing anticipated outside Europe compared with those that will be covered by the UK or EU Emissions Trading Schemes; or new taxes that increase with the number of miles flown or flights taken. A reduced rate of any carbon charge could be levied on any flights using a zero-carbon form of energy.
For the full AEF response to the consultation, click here.
The response by Hacan is at
The response by Stansted Airport Watch is at Stansted Airport Watch Response to HMT Consultation on Aviation Tax Reform (R)
The response from the Aviation Communities Forum (ACF)
Response from the ELF – the Environmental Law Foundation
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.