Good news for long haul travellers as Osborn reduces APD tax

Travel Association ABTA has welcomed George Osborn’s Budget announcement regarding Air Passenger Duty reform which will benefit consumers – particularly larger families flying long distance next year for their annual getaway. 

The new simpler system will take effect from April 2015.  As an example, a family of four will save £104 on flights to Sydney, Australia and £56 on flights to Cancun, Mexico.

The change means that flights to the Caribbean, for example, will be subject to a lower band of tax – bringing it down to the same level of tax as the US – which of course will benefit visitors arriving on long haul flights to the islands.

Mark Tanzer, ABTA Chief Executive said: “ABTA strongly welcomes the Chancellor’s announced cut to Air Passenger Duty and changes to the banding system as a first step in the reform of this damaging tax. Moving all long-haul flights into band B of APD at current levels will save passengers over £200m annually, and should boost travel and tourism as well as promote greater UK connectivity.

“ABTA has been at the forefront of campaigning to reform and reduce APD, and today’s announcement is a clear recognition from the Government of the negative impact this tax is having.

“Whilst today’s Budget is very much a step in the right direction, ABTA will continue to call for a reduction in overall rates of APD which, at their current band A and B levels, will continue to inhibit the contribution of the travel and tourism sector to growth and employment. ABTA will also review any potential anomalies created by the new banding system, and work with Government to mitigate their impact.”

The revised changes to APD rates can be viewed at:

http://abta.com/news-and-views/policy-zone/abta-welcomes-the-chancellors-announced-cut-to-air-passenger-duty

The Caribbean Tourism Organisation has called the budget reform a “complete victory” for the destination which was taxed more heavily than flights to the US.

Now, the air tax will be considerably simpler from April next year, with a two band system: A for short haul flights of under 2,000 miles from London and Band B for longer flights.

Previously, the heavier tax on Caribbean destinations meant that US holiday islands such as Hawaii were subject to a lower APD tax but now both destinations will fall under the same Band B tax level as of next spring.

 

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