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UK MPs Back APD Review

by Robert Lee, Tax-News.com, London

13 September 2012


Over half of the UK's members of parliament back a rethink of Air Passenger Duty (APD) rates, with 40% fearing that the levy is damaging the country's position as a global air travel hub, a new survey has shown.

The survey, carried out on behalf of the travel association ABTA, found that almost half of all MPs questioned believe that current rates of APD are putting UK businesses at a competitive disadvantage. 150 lawmakers were surveyed between May 22-June 22, with ABTA finding that 51% believe that a reduction in APD should be considered as a way to increase the UK's international competitiveness and encourage economic growth. According to ABTA, Conservative MPs are the most likely to believe that the current rates of APD are damaging to the economy. 61% feel that a potential rate cut should be investigated, while 57% worry that the UK's position as a travel hub is being hit by the high rates.

Along with its survey results, ABTA revealed that MPs have received over 250,000 letters from UK residents and foreign travellers asking for a review of the impacts of APD on UK jobs and growth. 96 MPs have now signed an Early Day Motion calling for such a review.

ABTA also points to a recent TripAdviser survey which found that 68% of UK travellers said the recently-increased APD would affect their travel plans, with 9% saying the impact would be "substantial". Nearly two thirds believed APD to be unfair.

ABTA is one of several organizations involved in the A Fair Tax on Flying Campaign. The campaign is headed up by 30 leading travel organizations including airlines, airports, trade associations and destinations protesting against what they see as excessive tax rates. APD rates have risen 160% on short-haul flights over the past seven years, and up to 360% on long-haul flights, the campaign says.

APD was increased by 8% in April following Chancellor George Osborne's latest Budget. Short-haul flights are now charged APD at GBP13 (USD21), with long-haul taxed at GBP65. The Office for Budget Responsibility projects an increase in revenue from GBP2.76bn in 2011-12 to GBP3.9bn in 2016-17.

Mark Tanzer, ABTA CEO, said: “At a time when we are facing one of the toughest ever downturns in history, the government must take every measure to get the country back on track to growth. The very fact that half of MPs believe current rates of APD are damaging the economy is a clear indication we need a review into the impacts of this tax before it does any further damage. Other governments, such as the Dutch, abolished the tax after a review found that the revenue raised was outweighed by the revenue lost. This summer has also shown there is overwhelming public support for a review so now the government is back from recess we call on them to listen and act.”

TAGS: tax | air passenger duty (APD) | law | aviation | United Kingdom | travel and tourism | tax rates | trade association | trade

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