Air Passenger Duty
|UK Government Departments|
Air Passenger Duty (APD) is an excise duty which is charged on the carriage of passengers flying from a United Kingdom or Isle of Man airport on an aircraft that has an authorised take-off weight of more than 5.7 tonnes or more than twenty seats for passengers. The duty is not payable by inbound international passengers who are booked to continue their journey (to an international destination) within 24 hours of their scheduled time of arrival in the UK. (The same exemption applies to booked onward domestic flights, but the time limits are shorter and more complex.) If a passenger "stops-over" for more than 24 hours (or the domestic limit, if applicable), duty is payable in full.
Air Passenger Duty charges take distance into account, making long distance flying significantly more expensive. One of the stated benefits of APD was to offset the environmental impact of air travel (see below) but critics point out that the tax takes no account of the efficiency of the aircraft. An airline using an old inefficient plane is treated equally to one using the latest most efficient engines.
|Band - From 1 April 2017 -||Reduced Rate – for travel in lowest class available on aircraft*||Standard Rate – for any other class of travel||Higher rate: GA flights over 20 tonnes and equipped to carry fewer than 19 pax|
|Band A (0 – 2,000 miles)||£13||£26||£78|
|Band B (Over 2,001 miles)||£75||£150||£450|
Air passenger duty is paid upon booking, but not collected until an occupied seat flies. Should a passenger be unable to fly they have a right to claim the paid tax back from the airline, although many airlines will charge an administrative fee for this service.
A £0 rate of APD applies to flights from Northern Ireland direct to a band B, C or D destination as of 1 November 2011. This is due to Continental Airlines threatening to stop the direct Belfast - Newark flight due to lack of demand because of the tax.
Rates in prior periods
|Old Rate||Previous rate||Feb 2007 - Oct 2009|
|European destinations, lowest class||£5||£10|
|European destinations, other classes||£10||£20|
|Other destinations, lowest class||£20||£40|
|Other destinations, other classes||£40||£80|
Here, 'European destinations' includes countries in the European Economic Area and certain other European countries.
Charges rose on 1 November 2009 and again on 1 November 2010. The distance used to calculate the new rate of APD is the distance between London and the capital city of the destination country as summarised below:
|New Rate||from Nov 2009||from Nov 2010||from Apr 2012||from Apr 2013|
|Band A (0 – 2000 miles)||£11||£12||£13||£13|
|Band B (2001 – 4000 miles)||£45||£60||£65||£67|
|Band C (4001 – 6000 miles)||£50||£75||£81||£83|
|Band D (over 6000 miles)||£55||£85||£92||£94|
|Band - From 1 April 2013 – 31 March 2014||Reduced Rate – for travel in lowest class available on aircraft*||Standard Rate – for any other class of travel|
|Band A (0 – 2,000 miles)||£13||£26|
|Band B (2,001 to 4,000 miles)||£67||£134|
|Band C (4,001 to 6,000 miles)||£83||£166|
|Band D (Over 6,000 miles)||£94||£188|
- If the seating in the lowest class has seats spaced at more than 1,016 millimetres (40.0 in) then the Standard Rate applies.
Flights from Northern Ireland have been charged at Band A from 1 November 2011. From 1 April 2013, APD was extended to cover flights on "business jets". (Source: Revenue and Customs website – data retrieved 22 July 2012.)
|Band - From 1 April 2014 - 31 March 2015||Reduced Rate – for travel in lowest class available on aircraft*||Standard Rate – for any other class of travel|
|Band A (0 – 2,000 miles)||£13||£26|
|Band B (2,001 to 4,000 miles)||£69||£138|
|Band C (4,001 to 6,000 miles)||£85||£170|
|Band D (Over 6,000 miles)||£97||£194|
Impact of APD
The Treasury forecast that the 2007 rise would cut carbon dioxide emissions by about 0.3 million tonnes a year by 2010-2011, and all greenhouse gas emissions by the equivalent of 0.75 millions tonnes of carbon dioxide a year, although that has been disputed.
In 2011, the Treasury launched a consultation on potential revisions to Air Passenger Duty. In their consultation they stated "Air passenger duty is primarily a revenue raising duty which makes an important contribution to the public finances, whilst also giving rise to secondary environmental benefits".
Also in 2011, an alliance of business groups, airports, airlines, destinations and trade associations came together to form the campaign group 'A Fair Tax on Flying', calling for the Treasury to conduct a macro-economic impact-assessment of the tax, and to reform and reduce the tax.
The Chancellor's Autumn Statement, on 29 November 2011, announced an 8% increase in UK APD set for April 2012.
In 2013 a study by PwC, 'The Economic Impact of Air Passenger Duty', found that abolition of APD could provide an initial short-term boost to the level of UK GDP of around 0.45 % in the first 12 months, averaging at just under 0.3 % per annum between 2013 and 2015. It stated that this increase would permanently raise UK economic output, to the point where the economy could be up to £16bn larger in the period 2013-15 than under the current system of APD. In addition, it found that abolition would result in an increase in investment and exports, implying investment may rise by 6% in total between 2013 and 2015, with exports rising by 5% in the same period. Almost 60,000 jobs could be created between 2013 and 2020, and although the abolition of APD would result in £3-4bn in lost revenue to the Treasury, PwC’s "cautious" analysis suggests that this would be offset by increased receipts from other taxes. The report concludes that this would lead to a positive net gain of £0.25bn per annum for the Government, or in other words, that abolishing APD could pay for itself, through increased Government revenue from other sources primarily due to business growth achieved through the benefits brought by abolishing APD.
At the 2014 Budget the Chancellor announced the removal of bands C and D of APD, coming into effect from 1 April 2015. It means that from 2015, the highest APD band levied was band B.
Devolution of APD to Scotland
When the process of devolving APD to Scotland are complete, the Scottish Government intends to reduce the rate by 50%, and eventually abolishing it completely once finances allow. This has caused concern that such a move could damage tourism in England.
In August 2015, Deputy First Minister John Swinney and Infrastructure Secretary Keith Brown jointly chaired the first meeting of the Scottish APD stakeholder forum to begin the process of designing and developing a Scottish APD..
Air Departure Tax was meant to be introduced to Scotland, starting from 1 April 2018, following passage of the Air Departure Tax Scotland Act 2017 on 20 June 2017 which received royal ascent on 25 July 2017, however due to exemption of APD for flights departing from airports in the Highlands and Islands, the UK and Scottish Governments agreed to delay the introduction of ADT, while sorting out the issues. In June 2018, the Scottish and UK Governments agreed it would not be possible to introduce ADT in April 2019. APD will continue to apply to flights departing Scottish airports, and HMRC will continue to have responsibility for administering APD in relation to Scottish flights, until the issues have been solved
In June 2017 the Conservative Party and the Democratic Unionist Party agreed to review APD with regard to its possible reduction or abolition for Northern Ireland’s airports. APD on direct long-haul flights from Northern Ireland were cut to be the same rate as short-haul flights as of November 1, 2011, reducing the tax then on economy (coach) fares to the US from £60 to £12 and in premium classes (business and first) from £120 to £24.
- Airport improvement fee, a related fee charged by the airport or government
- German air passenger taxes
- The Irish Air Travel Tax
- Ian Pearson
- French airplane ticket tax
- Notice 550 Section 4.1, HMRC
- "2008 Pre-Budget Report AIR PASSENGER DUTY (APD)" (PDF). HMRC. 24 November 2008. Archived from the original (PDF) on 29 June 2009.
- "AIR PASSENGER DUTY (APD)". Archived from the original on 3 September 2011.
- "Rates and allowances: Air Passenger Duty - Publications". Revenue Commissioners.
- "Reclaiming air passenger duty: It's just too taxing". The Travel Magazine. Retrieved 6 February 2013.
- "George Osborne confirms NI air passenger duty cut". BBC News. 27 September 2011. Retrieved 6 February 2013.
- Milmo, Dan (10 January 2007). "Ryanair accuses Brown of 'scalping' flyers". The Guardian.
- "Air passengers react to tax hike". BBC. 1 February 2007.
- "2006 Pre-Budget Report: Income tax allowances, national insurance contributions, child and working tax credit, fuel duty and air passenger duty rates". HM Treasury. 6 December 2006. Archived from the original on 27 September 2007.
- "Excise Notice 550: Air Passenger Duty". HM Treasury.
- "Pre-Budget Report 2006, Chapter 7" (PDF). HM Treasury. Archived from the original (PDF) on 26 March 2007.
- "Taxes 'fail to curb travel CO2'". BBC. 1 February 2007.
- "Reform of Air Passenger Duty: response to consultation" (PDF). HM Treasury. 7 December 2011. Archived from the original (pdf) on 3 May 2012. Retrieved 6 February 2013.
- "About Us - A Fair Tax On Flying". Fair Tax on Flying Campaign. Archived from the original on 28 August 2014.
- Budget 2014: Lower air tax on long-haul flights, BBC News, 19 March 2014
- Balala decries travellers' tax, Daily Nation, 8 October 2009
- Smith, Oliver (22 January 2015). "Scots to get cheaper holidays - what about the rest of us?". Daily Telegraph. Retrieved 31 October 2015.
- Air Passenger Duty news.scotland.gov.uk, accessed 31 October 2015
- Henry McDonald (26 June 2017). "DUP to seek corporation tax and air passenger duty deal to back Tories". The Guardian.
- 27 September 2011 http://www.travelweekly.co.uk/articles/38344/chancellor-slashes-apd-on-belfast-flights