Changes to Air Passenger Duty (APD) will come into effect on 1 April for UK airport departures, with the introduction of a new band increasing charges for long-haul fliers. The UK government has now announced these charges will increase further in 2024.
Introduced in 1994, APD is an excise duty charged to adult passengers flying from a United Kingdom or Isle of Man airport. APD is paid in addition to airport taxes and fees. Initially hailed as a ‘green tax’ that would reduce carbon dioxide emissions, APD was first set at £5 for European flights and £10 for long-haul flights.
Announced by the then Chancellor of Exchequer Rishi Sunak in the 2021 Budget, the latest rise in charges will come into force from 1 April 2023. Duty rates are broken down based on the final destination of the journey, and the passenger’s class of travel. Whilst APD on domestic flights will be cut, the tax for long haul passengers will increase, with a new ultra-long-haul band introduced for flights of more than 5,500 miles.
The UK has the highest passenger tax in Europe. Whilst the travel industry has been calling for reform to the APD for some time, these latest increases have been criticised for penalising business travellers at a critical time of recovery. Criticism has also been levied at the fact the APD is not an environmental tax, with revenues not having been ring-fenced or used for sustainability initiatives or developments.
What are the new Air Passenger Duty charges?
There is good news for those travelling on domestic flights from UK airports, with passengers seeing reduced charges from 1 April 2023. APD for passengers flying economy will decrease from £13 to £6.50 per passenger and any other cabins will go from £26 to £13. For mainland European destinations there is no change, with economy cabin charges remaining at £13 and any other cabins staying at £26.
APD for intercontinental flights will now be split into two different bands. Passengers travelling between 2001 and 5500 miles, to destinations such as Dubai, Bahrain and Delhi will see APD rise from £84 to £87 for economy class and £185 to £191 for all other cabins. For those passengers travelling over 5500 miles, which includes destinations such as Sydney, Tokyo and Bangkok, a new band will come into effect, with fees set at £91 for economy cabin and £200 for all others.
APD charges from 2024
The Spring Budget, which was unveiled on Wednesday 15 March, confirmed that the UK government is pressing ahead with further increases in Air Passenger Duty rates, which will be effective from 1 April 2024. APD rates for domestic flights will rise from £6.50 to £7 for economy seats in April 2024, while the rate for short-haul international journeys will remain at £13 and both long-haul bands will increase by £1 each, rising to £88 and £92 respectively.
We are, as always, supporting our clients to achieve the best possible fares for their travel and our long-standing partnerships with airline suppliers enable us to access the widest possible range of fares.
Helen Cox, Director of Flight Operations at Travel Places, said: “The new ultra-long-haul classification includes major business locations, so it will particularly affect corporate travellers and clients like ours, for whom frequent air travel is vital and locations non-negotiable.
“In addition to the increase in APD, fuel increases and political instability are all currently impacting the cost of flying. We are, as always, supporting our clients to achieve the best possible fares for their travel and our long-standing partnerships with airline suppliers enable us to access the widest possible range of fares. When budgeting for travel, it is important that businesses consider the rise in APD to some locations, as well as increasing fares, and that they plan ahead as far in advance as possible to limit the impact of rising costs on their business.”
Full information on charges and bands can be found on the gov.uk website.