The UK government will introduce a lower rate of Air Passenger
Duty (APD) for domestic flights from April 2023 in a bid to boost connectivity within
the nation, but long-haul taxes are due to increase.
Chancellor Rishi Sunak made the announcement as he laid out
his autumn budget plan. It includes a 50 per cent cut in APD for flights between
airports in England, Scotland, Wales and Northern Ireland in 2023/24 that will
be delivered via a new domestic band. That means passengers will pay £7.50 for each flight rather than the current £13.
However, a new rate of £91 for economy seats will be
introduced for ultra-long-haul flights of 5,500 miles or more, which Sunak said
will help the UK government achieve its carbon emissions reduction goals
because “most emissions come from international rather than domestic aviation”.
The current rate of APD for long-haul destinations (more than 2,000 miles) is £82 in
economy for 2021/22. From April 2022 this will increase to £84.
Sunak claims less than 5 per cent of passengers will end up
paying more APD, but that “those who fly furthest will pay the most”.
However, there were no details in the announcement about
whether money obtained through APD would be used for sustainability initiatives
as the UK strives to achieve net zero carbon emissions by 2050.
The news has come as a disappointment to the business travel
industry, which has been pushing for a reduction across all APD bands for
Clive Wratten, CEO of the Business Travel Association (BTA),
said: “The BTA welcomes the reassessment of domestic APD.
“The introduction of a new ultra-long-haul classification
will unfairly impact business travellers at a key point in the recovery of our
economy. The government said this was a budget bringing in a new wave of
optimism and yet business travellers will be heavily taxed to go to crucial
destinations such as Singapore, Hong Kong and Australia.
“We are calling on the government to ring fence at least 75
per cent of APD for sustainable initiatives to help our sector deliver on its
Jet Zero commitments. This must be about building a sustainable future, not just
Andrew Crawley, chief commercial officer at American Express
Global Business Travel, commented: “APD was supposed to be an environmental
tax, yet no money has been ringfenced for sustainable initiatives. The
government needs to get serious by investing the proceeds of APD in the
infrastructure we need to support the development of sustainable aviation fuel
(SAF). Making SAF widely available is the only way to make meaningful progress
against our net zero targets. If revenue generated from the new long-haul band
is not invested in a sustainable future, it will do nothing except penalise
British businesses trying to embrace the government’s own Global Britain initiative.”
Dale Keller, chief executive of the Board of Airline
Representatives in the UK (BAR UK), added: “It is inconceivable that the chancellor
is choosing to suppress his ‘Global Britain’ aspirations and posture ahead of
COP26 behind a highly flawed environmental rationale. The British public won’t
be fooled into thinking that the government is investing their APD money to
reduce CO2 emissions from air travel. This is another missed opportunity for
the UK to lead on overhauling obsolete taxation policies that are undermining
the huge investments in technology and infrastructure needed to drive the
sustainable recovery of a critical sector of the economy. Airlines have
committed globally to 2050 net-zero targets that require governments to develop
pragmatic policies and implement tangible interventions – not resort to
tinkering with blunt and regressive taxation that fails to meet the
expectations of the public or support the sustainability initiatives of the
“We welcome the solution to a longstanding anomaly where
return domestic flights have been taxed higher than international flights to
Europe, but why wait until 2023? This eventual correction should not be
regarded as a tax cut but simply the government finally doing what is fair and
right. But the notion that the world’s most heavily taxed long-haul travellers
should be expected to subsidise a tax correction for domestic travellers
underscores how APD remains not fit for purpose in stimulating a sustainable future
Joanne Dooey, president of the Scottish Passenger Agents’
Association (SPAA), said: “The increase in long haul APD… won’t help Scotland’s
economic recovery. It’s vital that businesses are able to trade globally from
their Scottish bases.
“According to Transport Scotland, international air
connectivity is important to our nation’s economy and that as an organisation
it ‘promotes sustainable economic growth through helping to improve Scotland’s
international air connections, providing enhanced access for business
travellers and inbound tourists alike’. It also continues ‘to promote Scotland
as a destination that can sustain more direct international air services and
better links to international hub airports’.
“As a small nation, Scotland needs its connectivity, so this
planned increase is disappointing not only for the travel industry but for
“We hope that the tax raised by this increase will be ring fenced
to support developments in sustainable fuels and other measures to move towards
Lauren Broughton, head of public affairs at UKinbound, said:
“While the reduction in domestic APD is a positive step, increasing APD on
long-haul flights is a kick in the teeth to the UK’s third largest export
industry, which is only just beginning its recovery. Inbound tourism brings new
money into regional economies, supports over 500,000 jobs across the country
and will significantly aid the country’s economic recovery and Global Britain ambitions,
but imposing further taxes on an already struggling industry is