UK Air Passenger Duty Update

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This is an update to our April 2011 article in response to the Government’s changes, announced on 29 November 2011, by the Chancellor in the Autumn Statement followed by the, just published, HM Treasury “Reform of Air Passenger Duty: response to consultation” of December 2011.  The principal changes affect the APD rates and the inclusion of business aviation for the first time.

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This is an update to our April 2011 article in response to the Government’s changes, announced on 29 November 2011, by the Chancellor in the Autumn Statement followed by the, just published, HM Treasury “Reform of Air Passenger Duty: response to consultation” of December 2011.  The principal changes affect the APD rates and the inclusion of business aviation for the first time.

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 from April 2013 will be extended to include aircraft with an authorised take-off weight of 5.7 tonnes or more.

Chargeable passengers are potentially all passengers (mostly fare-paying) with certain exemptions including cabin attendants and flight crew, young children under two without their own seat, transit/transfer passengers, short pleasure flights, flights from Scottish highlands and islands, military and Royal flights, employees undertaking certain specified duties and in circumstances beyond the control of the airline. It is also the government’s stated intention to exempt emergency flights (including medical, search and rescue, and police), helicopters, existing Public Service Obligation routes and research and training flights.

(For full details of exemptions see the HMRC website: www.hm-treasury.gov.uk)

Business aviation is targeted in a number of respects.  For example, from April 2013 there will be new premium rates (double normal rates) for passengers aboard aircraft with an  authorised take-off weight of 20 tonnes or more and fewer than 19 seats on the basis that this would indicate a luxury service.  The government will also introduce a scheme whereby business aviation operators may elect to estimate their average passenger numbers for the purposes of paying the APD to help minimise the administrative burden.

The rates – current bands/distances & two rates will be retained, as below.

Northern Ireland – Rates for passengers on direct long-haul flights departing from Northern Ireland airports are now reduced to the lower short-haul rate (Band A) because of the substantially lower rates in the Republic of Ireland.

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