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APD reform will save air passengers £200 million a year, says ABTA

Few people look forward to the Chancellor’s budget statement, but long-haul flyers will be pleased to hear that their flights are set to get cheaper.

In his Budget Statement George Osborne has revealed a reform of APD that cuts tax on long-haul flights. Mr Osborne said he wanted to “end the crazy system where you pay less tax travelling to Hawaii than you do travelling to China or India.” As of 1st April 2015, APD on flights between 4,001 and 6,000 miles will be slashed by £14 per person and £26 per person on those over 6,000 miles. This will mean a family of four flying in economy class will save over £50 when flying to the Caribbean or India and over £100 when visiting Australia.

This saving combined with savings on other holiday essentials, such as travel insurance, will help more families escape to more exotic destinations. ABTA, Association of British Travel Agents, has said that the move will save air passengers over £200 million a year.

Air Passenger Duty or APD has risen six times in as many years, soaring by 470% since 2007 and making British travellers some of the most heavily taxed in the world. Mr Osborne said that the high tax could be preventing tourists from visiting, businesses from exporting and also “creates a great sense of injustice among our Caribbean and South Asian communities here in Britain.”

The duty is currently split into four bands: A, B, C and D, depending on the length of the flight. However, from April bands C and D will be abolished, with all flights over 2,000 miles paying the same rate: £284. This means that people taking flights between 2,001 and 4,000 miles will be hit by a slight increase, up from £276. However, all other passengers will benefit. APD on short-haul flights in Band A have has remained unchanged, frozen at £52 since 2012.

The reform has been welcomed by ABTA, but it did say it would continue to call for a further reduction in rates of APD. A spokesman said: “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.”

Date Created: 21 March 2014

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