10 DECEMBER 2012

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Article from BTNews 10 DECEMBER 2012

COMMENT: APD gone mad

Chancellor hides increases

Congratulations to British Airways, easyJet and Virgin Atlantic who, in spite of punitive planned APD tax increases, are starting UK domestic routes now and in the spring.  And well done to Flybe for keeping its regional route network intact, at least for the present.

These heavy tax rises are due to be introduced by the Chancellor of the Exchequer on 1 April.  The APD increases were not mentioned in his Autumn statement, the figures hidden away in the Executive Summary, known as the ‘Red Book’.

From next April it will cost a family of four from Glasgow £104 in taxes to fly to London or say Belfast for the weekend (£13 per sector including children), whereas it will involve half that sum to travel to Dublin or Paris.  This is just about equal to the cheapest coach fare.  Trains start at £21 for the single journey.

Business Travel News believes that this unnecessary tax could be seen is a sop to the EU in helping to support continental destinations, and that it will work against the present Government when it seeks to be re-elected in 2015.  The regions do not like it as it is hardly an incentive to holiday in the UK.  The Scottish nationalists will no doubt promise to reduce the duty if they get their way in the forthcoming referendum.

The Office of Budget Responsibility (OBR) admitted that it will collect nearly £1bn less from Air Passenger Duty (APD) than first expected over the next five years.  The predicted fall in passenger numbers coincides with year-on-year increases in APD.

In a tough world we sadly expect to be taxed.  But the domestic APD is counter productive and one wonders if even legal.  APD is supposed to be levied as a capital to capital tax (itself daft – but we will not go into that one today – the new APD to Australasia, Malaysia and Indonesia in Economy Plus is £188).

Could an airport or airline, or individual, challenge HM Treasury in that the domestic figure should be zero?  London to London.  Has anyone the courage, or the pocket to do so?

Or perhaps a national newspaper!

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