APD on private jet flights – we need a level playing field
In today’s budget, George Osbourne announced that he is overhauling Air Passenger Duty (APD), admitting that the current system is ‘crazy and unjust’. All long-haul flights are now subject to the same level of tax. Private jet flights are also affected by this budget, with the announcement that they will all be taxed in the long-haul tax band B, regardless of distance.
This adjustments for airlines makes sense as the current system means that airline passengers on an 8 hour Caribbean flight can actually end up paying more APD than those on a longer 12 hour flight to the USA (as the current calculation is based on the distance between London and the destination country’s capital city).
But while the Chancellor is levelling the playing field in some respects, I think the Government has lost sight of the unfair impact of APD on British aircraft operators.
Instead of increasing APD for private jets, HMRC should be concentrating on collecting it from overseas operators, over 25% of whom are avoiding paying it.
A recent survey by private aviation industry body BACA reveals that over 25% of overseas operators, performing flights from the UK, are avoiding paying APD. Price is seen as the biggest barrier to attracting new private aviation customers, so anything that increases the price needs to be fair and industry-wide.
This is not a level playing field as UK aircraft operators cannot compete on price with those overseas who are choosing not to pay APD on UK flights.
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