In a move that is poorly timed with the COP26 conference in Glasgow, the UK Government has announced that Domestic Air Passenger Duty is to be reduced.
The new rate will come in April 2023 for flights between airports in England, Scotland, Wales and Northern Ireland.
Chancellor of the Exchequer, Rishi Sunak in his budget statement said:
“This will help the cost of living, with nine million passengers seeing their duty cut by half, [and] it will bring people together across the UK,”
Rises ahead for Ultra-Long Haul Passengers
Ultra long haul passengers will be looking to pay more, however. This will impact flights over 5,500 miles – with a new economy rate of £91 (£182 in premium classes).
According to the Chancellor, he wishes to target carbon from long haul flying, rather than domestic trips. An estimated 5% of passengers will be impacted.
Rishi Sunak added:
“Most emissions come from international rather than domestic aviation”
“So I’m introducing, from April 2023, a new ultra long haul band in Air Passenger Duty covering flights of over 5,500 miles, with an economy rate of £91.”
Expect the UK to the following destinations to be impacted (mainly Asian, Australia, South African and South America):
- Hong Kong
- Cape Town
This list is not exhaustive by any means.
What does the budget document say?
The government is introducing a package of Air Passenger Duty (APD) reforms that will bolster UK air connectivity through a 50% cut in domestic APD, and further align with UK environmental objectives by adding a new ultra-long-haul distance band.
Following consultation, the government will introduce a new domestic band for APD set at £6.50. The rate will apply to all flights between airports in England, Scotland, Wales and Northern Ireland (excluding private jets). As a result, around 9 million passengers will pay less APD in 2023-24. This will benefit connectivity between Great Britain and Northern Ireland.
In addition, the government is increasing the number of international distance bands from two to three, with the new distance bands set at 0-2,000 miles; 2,000-5,500 miles and 5,500 miles plus. The rates will be £13; £87 and £91 respectively for economy passengers. This will align APD more closely with environmental objectives by ensuring that those who fly furthest incur the greatest level of duty.
For the tax year 2023-24, the economy rate for the domestic band will be set at £6.50. The rates for the short- and long-haul bands will increase in line with RPI, meaning that the short-haul economy rate will remain frozen at £13 and the long-haul economy rate will increase by £3. The economy rate for the ultra-long-haul band will be set at £91, £4 greater than the long-haul band. This applies across the UK except for the direct long-haul rates for Northern Ireland which are devolved.
Don’t forget the raises pre-announced
Hidden in Budget 2021 in the Spring, was the announcement that Air Passenger duty is due to rise in April 2022.
This will rise in line with the Retail price index.
Whilst the rate remains “fixed” there will increase of £2 for those who are travelling long haul in economy class by £5.
For those travelling in premium economy, business and first-class will increase by £5.
Those travelling long-haul by private jets will see the rate increase by £13.
A missed opportunity for rail
The move to lower costs on domestic aviation will be welcome music to some (Ryanair), but for those who are consciously making the shift from Air to Rail (especially on Scotland/London Routes), it is much less of an incentive to catch the train.
Which has considerably a lower carbon impact than flying from A to B.
Whilst those who enjoy flying domestically will enjoy lower ticket prices and give the domestic airports a little lift (especially on domestic to London routes), I can’t help but think there’s a missed opportunity here to give rail a real shot in the arm too.
Considering there was little if any HS2 news in the Autumn statement – it’s less than an ideal situation.
As for ultra-long-haul passengers?
Head to Dublin, Paris or other countries to start your journeys when things calm down. You’ll be saving cash in the long run.
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