Air Passenger Duty

By | Category: Travel rumblings

© Dan Sperrin

With the budget less than a fortnight away the travel trade is boosting its attack on how high APD is and how damaging it could be for jobs and the economy if it stays at its high level. They have been boosted in that one of the few countries in Western Europe to retain such a tax has got rid of it. Ireland will have removed it soon because it was seeing reduced tourism coming into Ireland and fewer air passengers both of which meant the tax was not raising net money but costing the economy instead. Will George Osborne, the Chancellor, take heed?

Before they were elected, the Conservatives suggested a fairer version of the tax, – a tax per plane rather than per person.

What they have in mind now who knows. At the moment the tax raises about £2.2 billion says the Fair Tax Coalition which is composed of companies and organisations in the travel trade. How much though are we losing by imposing a tax that deters people from coming here and deters us from flying away? The Netherlands was one of the first countries to scrap such a tax as they noticed that their economy was suffering as a result. As well as the Irish, the Norwegians , Danes And Maltese have also removed similar taxes.

It may have once been seen as a tax on carbon emissions and a way to encourage cleaner and greener travel but today it is no more than another way of governments to raise cash. It isn’t even masked with green credentials any more. It is just blatant fleecing of the public. But, you might say, we need to raise revenue to reduce the amount of government borrowing so a relatively simple tax to operate is worth keeping. That logic works were it not for three major issues. The first is that the rest of the world is seeking tourists because it is fast way to encourage growth, jobs and to recover from the recession. We compete with other countries for visitors and we need to remain competitive or they will go elsewhere. Secondly it is unfair in that, being an island, air transport is often the only way to travel. With that is the fact that rail and ferry services are not taxed. The third issue is that there are ways around it for some people. If you have a trip to Australia for 4 people, the APD could amount to over £500. If you are close to an airport or a port with links to somewhere like Amsterdam you can save a bundle by having split tickets. One to Amsterdam or the Hook of Holland (and a train journey to Schipol, Amsterdam’s airport) and then a ticket from there to Australia. When direct train services begin to Amsterdam, it
will be even easier to avoid taxes. Avoidance is what happens when taxes get too high.

In British Tourism Week, this issue will be highlighted again and again. The government will say that Austria and Germany have introduced similar taxes. But they aren’t as high as ours and who knows how long they may last. That Ireland and the Netherlands have none and we can get to both countries relatively easily from anywhere in the UK means the government should be aware that it might be losing revenue (not to mention travellers) rather than making it.

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