chancellor air passenger duty

CHANCELLOR CUTS COST OF LONG-HAUL HOLIDAYS

Families will pay less for long-haul holidays from next year after the Chancellor of the Exchequer announced plans to reform the unloved Air Passenger Duty (APD) scheme from 1 April 2015.

George Osborne said that although rates of APD would rise this April in line with inflation, the top two levels of duty levied on long-haul flights would be abolished from next year.

The way that APD is charged has been adjusted several times since it was introduced in 1994 when passengers were charged just £5 for UK and European flights and £10 elsewhere. Rates are now dramatically higher and it raises £3 billion for government coffers.

Currently, the APD you pay on a ticket is based on the distance to the capital of your destination country and is split into four bands: 0-2000 miles, 2001-4000 miles, 4001-6000 miles and 6001 miles and more.

Band A covers Europe, band B covers the US, northern Africa and the Middle East, band C includes southern Africa, the Caribbean and some of south America while band D is everywhere else, including Australia and New Zealand.

The level of duty payable also depends on your class of travel as shown below.

Band

Reduced rate (for travel in the lowest class of travel available on the aircraft)

Standard rate(for travel in any other class of travel)

From 1 April 2013

From 1 April 2014

From 1 April 2013

From 1 April 2014

A (0-2000 miles)

£13

£13

£26

£26

B (2001-4000 miles)

£67

£69

£134

£138

C (4001-6000 miles)

£83

£85

£166

£170

D (6000 miles+)

£94

£97

£188

£194

 

Infants are not charged APD unless they occupy a separate seat.

The new reform announced in the budget will see the top two bands, C and D, abolished and flights to these countries charged at band B levels. It will mean that a family of four will save more than a hundred pounds if travelling in economy and more than £200 if they are travelling in premium economy or higher classes.

The Caribbean Tourism Organization (CTO) has welcomed the changes as it has long lobbied the Government to alter the rates of duty.

CTO chairman, Beverly Nicholson-Doty said: “This is a complete victory for the Caribbean, which, led by the CTO, has been lobbying against the unfair system which charged a higher rate of APD on flights to Barbados than Hawaii and placed the United States at a competitive advantage, We are delighted that the Chancellor has finally accepted the Caribbean’s proposal made in November 2010 to return to the simpler and fairer two band system.”

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