Budget 2021: Rishi Sunak announces Air Passenger Duty cut
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Wednesday’s budget announcement saw Chancellor of the Exchequer Rishi Sunak announce a new hike in air passenger duty (APD) taxes. Though APD is set to decrease for domestic flights, overseas journeys will be slapped with higher taxes.
The decision has been slammed by travel industry bosses as a “kick in the teeth for tourism”.
Gary Lewis, CEO of The Travel Network Group, said: “Reducing the air passenger duty on domestic flights – journeys which could be taken via other means – whilst increasing the passenger duty on long haul flights also feels like a kick in the teeth for the international tourism industry, with the Government effectively putting more obstacles in place for people who are looking to resume overseas travel and support tourist destinations which are starting to open up after almost two years of closure.
“Our industry will not recover until people are able to travel as freely and as confidently as they did before 2020.”
Which flight prices are set to increase?
The Government is targeting long-haul, international flights with the new APD rise.
More taxes will be imposed on long-haul journeys which exceed 2,000 miles.
Currently, APD is based on two bands – journeys over 2,000 miles and journeys under 2,000 miles.
Under the new APD rules, bands will expand from two to three.
These will be set at zero to 2,000 miles, 2,000 to 5,500 miles and 5,000 miles and above.
The distance is measured between the capital cities of the departure and arrival nations, with the exception of Russia where the nation is split into two bands due to its size.
Speaking in the House of Commons yesterday, Mr Sunak claimed less than 5 percent of all air passengers will pay higher fees, with charges reserved for “those who fly furthest will pay the most”.
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How much more will air passenger duty cost you?
The price of APD will depend both on the length of the journey you are making and the cabin in which you are seated.
The rate for flights less than 2,000 miles will stay the same at £13 per economy ticket.
However, flights between 2,000 and 5,500 miles will see a tax rise of £3 from £84 to 87 for an economy ticket.
Journeys exceeding 5,5000 miles will see a price hike of £7.
This means a rise from £84 to £91 for an economy ticket.
Travel experts from Which? Recommend people who are planning holidays in the future should think ahead and consider “budgeting for those possible changes”.
When will the new air passenger duty rules come into place?
The new APD hike is set to come into force from April 2023.
However, industry executives and experts are already urging the Government to rethink plans before the set out date.
The Travel Network’s Mr Lewis said: “Between now and when that time comes, we urge the Government to extend relief to the travel industry.”
Which flights are receiving lower air passenger duty?
Along with a hike for long-haul flights, Mr Sunak also announced a reduction in APD for short-haul flights.
The Chancellor said the price cuts would work to “boost to regional airports”.
He added: “Right now, people pay more for return flights within and between the four nations of the United Kingdom than they do when flying home from abroad.”
However, the price cut has been controversial amid the ongoing climate crisis.
Currently, the APD for an economy ticket on a one-way domestic flight is £13.
The new rate for the same flight will be £6.50 each way.
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