UK could lose millions from overseas jet operators not paying Air Passenger Duty

The UK stands to lose £4.6 million ($7m) of potential revenues over the next year as a result of overseas business jet operators not paying the new Air Passenger Duty (APD), according to PrivateFly, a private jet charter network.

The tax, which was extended to business jets in April 2013, applies to all business aviation flights departing from the UK, and PrivateFly believes that many aircraft operators based outside the UK will be unlikely to pay.

By using analysis from WINGX-Advance.com, PrivateFly has estimated the annual revenue potential from APD on business jet flights at £9.3 million. The company says half of this amount will be paid by UK operators, but claims that most overseas operators will not pay, resulting in the £4.6 million loss.

“With the onus being on the aircraft operator to register and pay APD independently, the system is bureaucratic and difficult to understand for small private jet companies who only fly to and from the UK occasionally, says Adam Twidell, CEO of PrivateFly. “The result will be many aircraft operators ignoring the tax. And with private aircraft able to use over 300 airports in the UK, the task of tracking down non-payers will be almost impossible for HMRC.”

“HMRC have already confirmed that APD on the private jet industry is expected to be a ‘revenue-neutral’ exercise based on projected costs of £2 to £3 million, he added.”It is a political stunt that is increasing red tape and is handicapping UK aviation companies already struggling to compete against low-cost overseas competition. The simple solution for HMRC is to enforce payment of private jet APD with landing fees at UK airports.”

According to PrivateFly, over 3,000 private jet companies flew into the UK in 2012, with 75% of those owning less than three aircraft.