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Air Passenger Duty Changes Effective April 1

by Robert Lee, Tax-News.com, London

26 March 2014


The Isle of Man's Treasury has announced an Order to amend the rates of air passenger duty chargeable on flights on or after April 1, 2014.

The duty rates for the majority of journeys will remain unchanged at GBP13 (USD21.5) or GBP26 per journey, depending on seat class, but those for journeys to more distant destinations will increase by GBP2 or GBP3 per person in economy. In Band A, for destinations up to 2,000 miles away, the rate will be GBP13 for economy class, and GBP26 for other seats; in Band B, for destinations between 2,001 and 4,000 miles away, the rates will be GBP69 and GBP138, respectively; in Band C, for destinations between 4,001 and 6,000 miles away, the rates will be GBP85 and GBP170, respectively; and for Band D flights, for destinations over 6,000 miles away, GBP97 and GBP194, respectively.

The announcement follows the release of the UK Budget, which reformed the way that air passenger duty is to be applied from April 1, 2014. Caribbean territories have for several years complained that flights from the UK were being taxed at a higher rate than equidistant flights, for instance to some US destinations. The regime is now being overhauled to ensure that the charges are based solely on the distance of the flight, rather than the destination. From April 1, 2015, the APD regime will be further simplified under two bands, rather than four.

The Isle of Man mirrors the UK's air passenger duty regime other than for business jets. In October 2012, the Isle of Man said it would not apply an enhanced rate of APD on aircraft of 20 tonnes or more that have fewer than 19 seats. In the UK, the rate for these fares, from April 1, 2014, will be four times the economy rate, but will rise to six times the economy rate from April 1, 2015.

TAGS: Isle of Man | tax | business | aviation | United Kingdom | tax rates | tax reform

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