Britain boosts tax on business class, first class flyers

By Bloomberg News, November 25 2017
Britain boosts tax on business class, first class flyers

Travelers flying long-haul from Britain in business class and first class, as well as on private planes, will pay a little more for leaving the country as of next year.

The UK Treasury will increase so-called 'air passenger duty' for business- and first-class passengers by £16 (A$28) to £172 (A$300) , while lifting the fee for private jets by £47 to £515.

In announcing the increase as part of the nation's Autumn Budget, Chancellor of the Exchequer Philip Hammond quipped “Sorry Lewis,” an apparent reference to Formula 1 motor-racing champion and private jet owner Lewis Hamilton.

Airlines have been campaigning for years for governments to scrap APD, which is added directly to the price of a ticket.

The new measures, which also extend a five-year freeze on the short-haul duty introduced by former Chancellor George Osborne, are due to take effect from April 2019.

The Airlines UK lobby group said Hammond’s announcement amounts to a “sleight of hand,” and that without a cut in APD the tax will remain the highest in the world. It added that the increase in long-haul duties may threaten the viability of some services, and with Brexit looming “doesn’t do anything” for the nation’s ability to open up links to emerging markets.

While Britain is Europe’s biggest private-jet market, evidence has emerged that UK demand for corporate flights is being held back as uncertainty around the split from the European Union hurts the economy and stymies bookings.

Private flights from Britain advanced 5.9% in the first nine months, versus an 11% jump in Germany, according to data compiled by the European arm of Warren Buffett’s plane-rental specialist NetJets.

While Farnborough, 40 miles southwest of London, remains Europe’s busiest business-jet hub, and had the biggest increase in demand, Munich and Frankfurt ranked second and third for growth.

The data refers to flights involving individuals worth at least 30 million (A$47 million) and corporate executives, about a third of whom are bankers, NetJets said, adding that demand in the category is closely tied to economic growth.

Qantas - Qantas Frequent Flyer

02 Jul 2011

Total posts 1387

Yet another reason to avoid LHR

21 Jan 2017

Total posts 3

Is it just LHR? Couldn't find that out, but it looks like it's for every airport in UK.

Inverness is probably the most viable mainland exception.

And a reduced rate applies from Northern Ireland.

China Airlines - Dynasty Flyer

22 Sep 2012

Total posts 68

Well that encourages me to fly PE at most to aviod these fees into LHR. Thats the problem with Any tax no matter how small it starts off. They will keep milking it unless business demand starts to drop. Also it is not politically risky election wise as they think its mostly non British residents that will pay or just the rich which they think have no chioce but to continue voting for the tories...

12 Dec 2012

Total posts 967

From my understanding of the APD rules, the "reduced rate" only applies to the "lowest class" available on the flight. Premium Economy cabins would be hit with the same higher rate of Business and First as PE is not the "lowest" class on the flight.

The given APD rates apply to all international departures from England and Wales. Scotland and Northern Ireland have lower rates.

China Airlines - Dynasty Flyer

22 Sep 2012

Total posts 68

By the way 16 pound to 300 pounds is hardly a small increase and probably not be the last increase. It would be not so bad if money was directed for only improvement of airport faciities but it will be wasted instead.

21 Jan 2017

Total posts 3

I just read about an increase from £16 (A$28) to £172(A$300) - nothing about £300. Even £172 is a huge amount.

Virgin Australia - Velocity Rewards

22 Oct 2015

Total posts 3

If I read it correctly in this article, it's just £16 increase for business and first from the current £156 to £172 and a similar £47 increase for private jets.

Jetstar Airways - Qantas Frequent Flyer

23 May 2017

Total posts 18

Frankly I am so well orf that I don't give a fig!

17 Sep 2015

Total posts 391

tris06, if I recall, APD has only ever been levied on departing passengers not when we arrive.

17 Nov 2016

Total posts 14

Yes, it's only for departing passengers, you don't pay it if you transit from another country either.

Singapore Airlines - KrisFlyer

14 Jan 2014

Total posts 310

Which is why some people fly to Amsterdam first and then start their journey from there when flying Biz or First Class long haul. This means when they fly back to LHR, they are treated as transit passengers.

Saves them a pretty penny if you have the time to spare.

China Airlines - Dynasty Flyer

22 Sep 2012

Total posts 68

My apologies I didn't read it correctly. So if you are purchasing a business class ticket from say Australia or HK then you won't pay for this on your return ticket? Seems add considering we still need to depart and therefore we need to still pay for the departure tax.

It applies to all passengers flying out of the UK, so yes, APD will be included in the cost of your return ticket, as it applies to the flight home (but not the inbound flight).

12 Dec 2012

Total posts 967

It depends how long you stay in the UK.

All departures out of the UK have some level of APD applied. The "lowest class" on the flight gets the reduced rate, higher classes get the "standard" rate. Flights from Scotland and Northern Ireland have different rates.

There is no tax applied for transits, ie: if you are in the UK for less then 24 hours.

12 Dec 2012

Total posts 967

The longer APD exists, the less likely I'll be staying in the UK for more then 24 hours.
If they ever add it to transits, then I won't be flying through the UK at all.

17 Sep 2015

Total posts 391

tris06, if your airline flies out of Paris (CDG), why not catch the comfortable, fast Eurostar train from London to Paris and then connect by train to CDG airport, avoiding the APG impost?


Add in a night in Paris if you wish.

Qantas - Qantas Frequent Flyer

09 Sep 2013

Total posts 177

Not a bad option Traveller. Are you able to give us a quick comparison on the costs involved, say how much by the airport express from London to LHR plus the APG, compared to London to CDG on the Eurostar? Regards..

China Airlines - Dynasty Flyer

22 Sep 2012

Total posts 68

Actually if you read my previous comments i said i would just go PE instead.

However now I realised my mistake was it is just a 16 pound increase. But still it does not help in making the UK a cheap place to fly to and still this is with a conservative government one would hate to think what a labour government would like to charge.

And actually until now I only ever flew into UK in economy from Amsterdam as the airline I took didn't fly to LHR. So if i flew business class then i would just buy the economy KLM connection flight.

27 Nov 2017

Total posts 1

The Brits are really digging a hole for themselves...

British Airways - Executive Club

07 Sep 2012

Total posts 48

The best way to avoid the ADP... fly into the UK, but leave from anywhere else other than the UK.


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