The Government has announced that they are raising the tax on flights, but only for those flying in seats more expensive than economy.
Chancellor Jeremy Hunt unveiled in his Budget today that the amount of tax paid on “non-economy flights” will be increased.
He has not yet said how much it will increase by – this will likely be announced later today by The Government.
“I will make a one-off adjustment to rates of Air Passenger Duty (APD) on non-economy flights only to account for high inflation in recent years,” Mr Hunt told everyone at the House of Commons.
If you’re planning a holiday using budget airlines like Ryanair, easyJet and Wizz Air, your APD included in each fare won’t increase, reports The Mirror.
There are three different costs for APD: a smaller rate for economy, a standard one for business class seats and a higher level for private jets. People flying business class pay from £13 for small trips around the UK and up to £200 on the longest overseas journeys.
A tiny rate increase for business class flights, starting from April 1 was already announced. This will raise the tax to £14 on domestic flights and £202 on the longest international ones.
It is unknown if this rise will go up anymore. At the moment, all money collected from APD adds up to a whopping £3.8billion a year for the Treasury.
The one-off adjustments to APD have not gone down well with some industry experts. Clive Wratten, the CEO of the Business Travel Association (BTA) described the move as “disastrous”.
He pointed out that those travelling in business class are not always wealthy. He said: “The introduction of an increase in non-economy Air Passenger Duty is disastrous for the economic welfare and well-being of British businesses and their employees.
“Contrary to common misconceptions, business travel is not just for the wealthy. This tax will hinder growth for small and medium enterprises through limiting international collaboration opportunities.
“It will hit charities, academics and researchers alongside businesses of all sizes combatting rising costs in every area.
“There is no mechanism for ensuring that the monies from this tax will go into innovation in the airline sector nor into Sustainable Aviation Fuels. This is therefore just another tax on British businesses.”
However, Matt Finch, the UK Policy Manager of Transport and Environment UK, said: “The aviation sector is massively undertaxed, and this long overdue change, that will come into effect in 2025, is the tax equivalent to rearranging the deck chairs on the Titanic.
He also raised concerns about fairness, saying, “It’s baffling that the Chancellor didn’t do this years ago. But it’s still completely unbelievable that airlines don’t pay a penny in fuel duty when you and I have to pay every time we fill our car up. Where’s the fairness in that?”
This comes nearly a year after previous Chancellor Rishi Sunak halved domestic APD. The rate was lowered from £13 to £6.50 from the start of April last year.
The move was intended to help airlines like Ryanair and easyJet after they were hit hard by Covid lockdowns.