Osborne rejects industry lobbying and increases APD

14th December, 2012

Figures accompanying the autumn budget confirmed that Air Passenger Duty (APD) will increase from April next year in line with the Retail Price Index. The aviation industry mounted a concerted campaign to have APD frozen or cut, but Osborne has clearly rejected the calls.

By virtue of exemptions from fuel tax, aviation currently avoids around £9 billion of tax every year, even after taking account of APD. If this tax were paid, it would be possible to significantly reduce cuts to public services while not affecting the rate of deficit reduction.

April 2013 will also see the introduction of a new tax on business jets – a measure AEF has long supported. The weight threshold for aircraft to be covered by APD will be lowered from 10 tonnes to 5.7 tonnes bringing in many smaller jets, and a new rate will be introduced for the most luxurious jets: those weighing 20 tonnes or more but with fewer than 19 seats.

The table below shows the new rates against the current ones (using information from the autumn budget and HMRC information about the business jet tax).

 

APD distance bands	£ per passenger
Miles from UK	Reduced rate (in lowest class of travel)		Standard rate (in other than lowest class of travel)		Higher rate *
	Current rate	Rate from April 2013	Current rate	Rate from April 2013	Rate from April 2013
Band A (0-2000)	13	13	26	26	52
Band B (2001-4000)	65	67	130	134	268
Band C (4001-6000)	81	83	162	166	332
Band D (over 6000)	92	94	184	188	376

* To apply to aircraft with an authorised take off weight of 20 tonnes or more authorised to seat less than 19 passengers.