News: Aviation tax reform plans may be dropped

Flights > News > # 1822 (02/07/2008)

A Government minister has hinted that controversial plans to replace air passenger duty (APD) with a tax on aircraft could be abandoned.
Parliamentary undersecretary for transport Jim Fitzpatrick said: “Difficulties surround the decision. There are strong arguments that we should not proceed with the transition.”
Air travellers currently flying from the UK pay APD of between £10 and £80, depending on destination and class of travel. Earlier this year, the government announced plans to scrap APD in favour of a tax based on the age and efficiency of the aircraft, which was expected to raise as much as £2.8 billion for Treasury coffers. Any move to drop the plan would be welcomed by the airline industry, which has fiercely criticised the proposed new tax.
The tax also led the US government to write a formal letter of protest questioning the scheme’s legality. “The Treasury’s proposal, although cast as an environmental measure, appears in reality to constitute nothing more than a device for generating additional revenue,” the US ambassador wrote.
While the tax is not scheduled to come into force until November 2009, a preliminary outline of its workings is due to be released next month, with full details to be announced this October.