Holidays to far-flung destinations including Australia and New Zealand will become more expensive after tax hike on ultra-long-haul flights, but domestic plane trips will be cheaper

  • The Chancellor has increased Air Passenger Duty for flights of over 5,500 miles 
  • Mr Sunak also announced a 50% cut in APD for flights within the UK 
  • ‘Rishi Sunak should be investing in trains,’ argues environmental group
  • ‘Citizens with family in far-flung destinations are being punished’ – travel expert 

Families face paying more for their big holidays and visits to relatives in far-flung places after Rishi Sunak said taxes would be raised on ultra-long-haul flights.

The Chancellor has increased Air Passenger Duty (APD) for flights of over 5,500 miles, which includes places such as New Zealand, Australia, South Africa and Japan.

The move is likely to be billed by the Treasury as a demonstration of Mr Sunak’s commitment to the green agenda ahead of next week’s Cop26 climate summit in Glasgow.

Families face paying more for their big holidays after Rishi Sunak said taxes would be raised on ultra-long-haul flights. Pictured is Heathrow’s Terminal 5

But Mr Sunak also announced a 50 per cent cut in air passenger duty for flights within the UK.  

Friends of the Earth’s head of policy, Mike Childs, reacted with dismay.

He said: ‘Cutting Air Passenger Duty on domestic flights is an astonishing move that completely flies in the face of the climate emergency. The Chancellor should be making it cheaper for people to travel around the country by train, not carbon-guzzling planes.

‘Air Passenger Duty for all flights should have been increased, or even better replaced with a frequent flyers levy, aimed at curbing multiple flights taken by a minority of people each year.’

And SNP Westminster leader Ian Blackford has branded the planned cut to domestic APD a ‘disgrace’ and called on Mr Sunak to scrap it.

Mr Blackford questioned the wisdom of the Chancellor’s move ahead of the crunch Cop26 climate summit in Glasgow.

He told the Commons: ‘Chancellor, this is a disgrace and shows quite frankly that this is not a Government that understands the climate challenge that we all face and the Chancellor should withdraw and remove that proposal.’

The Treasury revealed earlier this year it was considering raising taxes on flights to the furthest flung destinations to make the ‘polluter pay’.

APD is currently charged in two tax bands – for flights of up to 2,000 miles and for trips of more than 2,000 miles.

People on long-haul flights already pay £80 APD. Domestic flights are charged the short-haul rate of £26 for return travel. While APD is paid by airlines, much of the cost tends to be passed on to travellers.

Mr Sunak said: ‘Right now, people pay more for return flights within and between the four nations of the United Kingdom than they do when flying home from abroad.

Mr Sunak announced a 50 per cent cut in air passenger duty for flights within the UK 

‘We used to have a return-leg exemption for domestic flights but were required to remove it in 2001. But today I can announce that flights between airports in England, Scotland, Wales and Northern Ireland will from April 2023 be subject to a new lower rate of Air Passenger Duty.’

He added: ‘We’re also making changes to reduce carbon emissions from aviation. Most emissions come from international rather than domestic aviation.

‘So I’m introducing, from April 2023, a new ultra long haul band in air passenger duty – covering flights of over 5,500 miles, with an economy rate of £91. Less than five per cent of passengers will pay more, but those who fly furthest will pay the most.’

In response, Tim Aldersdale, chief executive of Airlines UK, said: ‘Reducing the rate of domestic Air Passenger Duty will correct an anomaly that has existed for too long and greatly enhance connectivity to and between all the regions of the UK, supporting route viability and enabling businesses and sectors across the economy to access markets, attract inward investment and support our tourism industry.

‘For many people and companies wanting to do business in the UK or see family and friends – particularly across Scotland and Northern Ireland – travelling by air remains the only viable option. This will make a tangible difference to their lives, providing more choice and frequency for consumers, and bringing all parts of the country closer together.’ 

Paul Charles, CEO of travel consultancy The PC Agency, said: ‘The Chancellor is punishing British citizens with family in far-flung destinations. London to Hong Kong, at 5,976 miles; or to Auckland, NZ, at 11,386, are among the worse affected by the new ultra-long-haul tax band. It would be better for the government to invest more in sustainable aviation fuel development so that airlines can fly on zero-emission fuel as soon as possible.

‘The APD cut for flying across the UK is a welcome move however and will help connect parts of the UK badly or unable to be served by train. It’s a boost for regional airports which can plan for further growth and renew investment programmes put on ice by the pandemic.’ 

Acting General Secretary of pilot’s union Balpa, Martin Chalk, issued fierce criticism of the Chancellor’s APD changes.

Luis Gallego, chief executive of BA’s owner, IAG, said: ‘The hike in long-haul APD will penalise Global Britain, consumers and businesses’

He said: ‘Whilst we welcome the reduction of domestic APD, the creation of a new band for longer-haul flying makes no sense. It will now be much harder to capitalise on our recent free trade deals with countries such as Australia and New Zealand and it also unfairly penalises those who need to travel over 5,500 miles to see family. This flies in the face of the Government’s Global Britain agenda.

‘With UK aviation only just being able to see the light at the end of the tunnel, this Budget provides no support for our once world-leading aviation sector, and no recognition of the contribution we make to UK PLC.’ 

Mr Chalk’s thoughts were echoed by Luis Gallego, chief executive of BA’s owner, IAG.

He said: ‘The UK´s economic recovery is powered by its international connectivity. The hike in long-haul APD will penalise Global Britain, consumers and businesses at a time when the UK should be more competitive on the global stage. 

‘We need to get Britain back on its feet by supporting entrepreneurs trying to generate new business across the world, restoring connectivity and enabling aviation to support UK’s trading economy, growth and jobs. This will also limit the airlines’ ability to invest in green technologies.’ 

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