Chancellor to freeze APD hikes

George Osborne looks set to reverse plans to increase Air Passenger Duty in this week’s budget.

It had been thought the Chancellor would increase APD in line with inflation, a move that would have raised around £140 million in tax revenues. The planned increase would have added around £9 to a long-haul business class flight

But it is now being widely reported that Osborne will freeze APD rates in Wednesday’s budget, although it’s possible he will attempt to offset the cost by widening the APD system to include private and corporate jets.

Earlier this month travel trade association ABTA launched the Fair Tax on Flying campaign, addressing concerns at the level of APD and its effects on UK competitiveness (see online news March 3).

Changes being petitioned by the campaign include adjusting APD to take account of the EU’s Emissions Trading Scheme starting in 2012, and changing the premium economy APD banding, which is currently set at the same levels as business and first class flights.


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