8 DECEMBER 2014

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Article from BTNews 8 DECEMBER 2014

COMMENT: APD Not good enough

The Chancellor of the Exchequer’s Autumn Statement last week announced that Air Passenger Duty (APD) for children under 12 in Economy is to be abolished from 1 May 2015, and from 1 March 2016 for all up to 16.  This is the opposite of the "rich get richer and the poor get poorer". Why this anomoly who knows?

What Mr Osborne is saying is that once they reach the age when they can legally go out to work yougsters need to pay air tax. 

But he should have made the changes when the Conservatives came to power and not after being harangued by just about everyone.  He even missed the opportunity last year when the mileage bands were altered.

In truth the Chancellor is in a real mess over APD and needs to think the whole thing out again.

Is the Prime Minister going to fully accept the recommendations of the Smith Commission and with it the removal of APD for Scotland?  He indicated that the Commission’s proposals would be implemented in full.  However, this does not seem to be the case with Sir Howard Davies Airports Commission.  The Transport Minister, Robert Goodwill, speaking at the recent annual Airport Operators Association (AOA) conference (LINK) said that the government would have to “consider” the suggestions.  Is it one rule for Scotland and another for the rest of the UK?

Much as we would like it the tax is not going to go away.  It generates too much revenue for a beleaguered government when it comes to income.  But it does require tidying up.  The Autumn Statement has to be a first step in realistic APD aims and charges.

Currently an away day from London to Scotland means paying APD twice.  For an away day to Paris you pay just the outbound.

The solution is very simple.  Domestic flights booked on a single PNR (passenger name record) should be taxed just once.  The new Flybe “shuttle” is charged APD wise as a single flight even although it goes into two mainland airports between Aberdeen and Jersey.  A precedent has been set.  Perhaps Flybe or another airline with domestic services should challenge the Treasury.  The publicity alone would be worth the trouble.

The Government also revealed this week that it is considering making it a requirement to display fare calculations so that they are more transparent.  No longer will airlines be able to hide normal business operations (for instance airport handling charges) and call them taxes.

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