Air Passenger Duty in the UK
Air Passenger Duty (APD) was first introduced by the UK Government in 1994 as a tax on air travel. It is a duty of Excise which is levied on the carriage, from a UK airport, of chargeable passengers on chargeable aircraft. It becomes due when the aircraft first takes off on the passenger’s flight and is payable by the operator of the aircraft. The amount due is dependent on the final destination and class of travel of the chargeable passenger.
Chargeable aircraft are potentially all aircraft (including helicopters) which are designed or adapted to carry persons in addition to flight crew. There are two main exemptions: small aircraft, being those with an authorised take-off weight of less than ten tonnes or fewer than twenty seats for the passengers and private aircraft. Operators of private aircraft are not normally liable to duty unless the passengers pay for their carriage.
Chargeable passengers are potentially most passengers carried but there are a number of exceptions and rules for specific categories. In general, provided that the operator is an Air Transport Undertaking (as defined), a chargeable passenger is anyone carried on the aircraft unless they fall within one of the specified exemptions. In the case of an operator which is not an Air Transport Undertaking, it is normally liable to pay APD for any passenger carried for reward (but not “young children”, being those under two who are not allocated a separate seat before boarding).
Exemptions may apply for passengers in a number of categories – for example, “non passengers”, young children (see above), transit passengers and those on connecting flights or those on “short pleasure flights” or on flights departing from specified airports in the Scottish Highlands. For precise details of these and other exemptions, as well as registration, accounting, administrative and payment requirements reference should be made to the appropriate regulations. HM Revenue & Customs (www.hmrc.gov.uk) have a Helpline (0845 010 9000) and useful guidelines (eg. Notice 550 Air Passenger Duty, August 2010 or as amended/replaced from time to time).
The rates of APD have varied over time with differing bands according to distance and class of travel. From 1 November 2009 four geographical bands based on distance from the UK were introduced each with a different rate of APD. In 2010 the Government provided for an increase in these rates in 2011. However, that increase was delayed in the April 2011 budget until next year and will now take effect from 1 April 2012.
The current APD regime is as below.
|Current APD Bands||From 1 November 2010|
(estimated rates from 1 April 2012)
|(Distance in miles from UK)||Reduced Rate*|
(in lowest class of travel)
(other than lowest class)
|Band A (0-2000)||£12 (£13)||£24 (£26)|
|Band B (2001-4000)||£60 (£65)||£120 (£130)|
|Band C (4001-6000)||£75 (£82)||£150 (£164)|
|Band D (over 6000)||£85 (£93)||£170 (£186)|
|*Bracketed estimates indicated notional APD rates effective from April 2012, assuming uprating of reduced rates by forecast RPI inflation in 2011 (deferred for 1 year) and 2012, rounded to the nearest pound (and standard rates are twice reduced rates).|
Current Position as at April 2011
In his Budget speech to the House of Commons on 23 April 2011, the Chancellor announced certain changes and proposals in relation to APD.
1. The Government’s intention expressed in the 2010 Budget to change APD from a passenger-based tax to a per-aircraft tax has been dropped due to concerns over the legality under international law (Chicago / ICAO).
2. Due to the economic climate, the planned increase in the rates of APD will be delayed until April 2012.
3. The Government proposes other changes to APD which are expressed in a Consultation Paper published in March 2011, see below.
4. A key proposal is the extension of APD to Business Aviation at present normally exempt by virtue of the general exemption for passengers on aircraft with an authorised take-off weight of less than 10 tonnes or with less than 20 passenger seats.
5. A new exemption is proposed for passengers on aircraft with an authorised take-off weight of 5.7 tonnes or less.
6. Other considerations relate, for example, to rates, geographical bands, class-of-travel distinctions, exemptions and regional differentials (as well as devolution issues in respect of Scotland, Northern Ireland & Wales).