Refunding APD

By | Category: Travel rumblings

Heathrow Terminal 3

Air Passenger Duty was introduced in 1994. On every airline ticket purchased it is payable and it is the duty of the airline to pass this tax onto the government when the passenger flies. But what happens if the passenger doesn’t fly?

In that situation, the airline should refund the tax but does it? I can’t believe it passes it to the government so the suggestion is that airlines have been “stealing” our money. Not all airlines and not in all cases. Sometimes it is our own fault in not claiming the tax back.

One man has decided he has had enough. Tony White, chairman of the Air Travel Advisory Bureau (ATAB) has opted to try and sue airlines in order to obtain refunds. In conjunction with the law firm, Barker Gillette, he is hoping to launch a class action (a law suit on behalf of more than one claimant) for its return. The class action is a last resort as he hopes matters will be settled out of court. In some cases the cost of litigation will outweigh the money to be claimed so some airlines might yield before it gets that far.

But what about those airlines that charge administration fees in order to process a refund? Given the tax is worth £12 for a domestic or a flight within Europe, a fee of £10 or £15 to process the tax refund might be justified. But when we get to a tax take of £60 per person, could an airline get away with charging that amount or say, £75 to process it? A court might rule this excessive.

In the case of Ryanair, for example, I have missed a flight and been forced to buy another ticket so having paid the tax twice. But I didn’t claim against them because the tax was less than the administration charge I would have had to pay them. How many of us have thought similarly? During the volcanic ash outbreak last year, there was a refund I didn’t claim as well.

ATAB says that continental airlines refund the tax directly to the credit card or debit used. So why doesn’t that happen here? A good question for which there seems no answer.
The amount of APD held by airlines and not refunded is difficult to estimate because nobody knows how many “no-shows” there are. So the amount needing to be refunded could be small or run into millions. What we do know is that as the tax has skyrocketed the tax element of a fare can know match the base ticket price or even exceed it. So if this action does nothing more than get airlines to focus and resolve the problem it will be worthwhile. Otherwise I can see lots of small claims court actions in the future.

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