Thanks to a recent report from Sainsbury's Finance claiming that families are planning to avoid or reduce APD by taking more staycations and long-haul flights from other European countries, APD is back in the news again.
Not that it’s been out of the news much (try Google-ing it). Since it was introduced in 1994 to combat the lack of VAT on fuel, APD has been the subject of many an angry rant from leisure and business travel journalists, who fight back with renewed vigour each time an additional price hike is announced.
And who can blame them? What started out as an extra £10 per passenger per long-haul economy flight from the UK peaks at an incredible £125 come 2016. The Government defends APD tooth and nail, claiming it’s a valid eco-tax. But they would, wouldn’t they? It accounts for £2.6bn in additional revenue to the treasury.
My question is whether APD is about to back fire on the Government as savvy business travellers get wise and fly short haul out of the UK using Charles de Gaulle, Schiphol or Frankfurt as their long haul hubs. This would certainly reduce the APD coffers in the short term and damage the UK economy in the long term.
If APD really is a green tax as the Government claims, maybe they need to look at ways to incentivise airlines to be more environmentally friendly rather than penalising the passengers who – just possibly – think they’re already paying enough taxes as it is.
Posted by David Chapple - talk to him on Twitter @btshowlondon
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