Government scraps APD for children

The UK government has scrapped the controversial Airport Passenger Duty (APD) for children.

In his Autumn Statement, Chancellor George Osborne confirmed that passengers under the age of 12 would no longer be subject to the tax. The ruling will be expanded to passengers under 16 years of age from 2016.

Passengers under 12 years of age will be exempt from APD from May 2015
Passengers under 12 years of age will be exempt from APD from May 2015

In a subsequent Tweet, the Treasury said that the move would “save a family of four £26 on a flight to Europe, and £142 on one to the US”.

The move has been broadly welcomed by the UK travel industry. ABTA’s chief executive, Mark Tanzer, called the decision a “hugely positive step for UK families” and said there “appears to be a growing consensus in the government of the damaging impact of this blunt and harmful tax.”

Airlines were also positive about the ruling, with Craig Kreeger, chief executive of Virgin Atlantic, calling it “great news for families”. But he also reiterated the industry’s call for the APD to be scrapped altogether.

“[The ruling is] another step on the long road to reform of this economically damaging tax following the banding changes last March,” Kreeger said. “However there is a growing body of evidence demonstrating the huge benefits, both to the travelling public and the UK economy, of reducing or abolishing APD across the whole of the UK.”

Cathal O’Connel, CEO of bmi regional, said the industry would continue to campaign against the APD.

“This is a step in the right direction, but our fight against this unfair tax must continue,” O’Connel said. “We believe that APD – the highest such tax in the world – is holding back economic development, preventing investment and discouraging visitors.”
But UKInbound, which is tasked with attracting more visitors to the country, said it was optimistic about the direction in which government policy appears to be heading.

“APD was last reviewed only eight months ago so the changes today confirm tourism, and the benefits it brings to the UK economy, is high on the government’s agenda,” said the body’s chief executive, Deirdre Wells OBE. “We now eagerly await to see what the party manifesto’s outline for tourism ahead of next year’s general election”.

APD reaction in quotes

“Introducing the first change… in May presents significant practical difficulties. Changes to APD should have at least a 12 month lead in time due to advance bookings.” Nathan Stower, chief executive, British Air Transport Association

“We see George Osborne’s announcement as the crumbling of the first pillar in the ‘Parent Trap’. But it does not go far enough.” Richard Singer, European managing director of Travelzoo

“This is just tinkering at the edges and represents a missed opportunity.” Saad Hammad, chief executive of Flybe

“[The UK] will probably see an increase in demand for long-haul holidays.” Dimitris Hiotis, partner at Simon-Kucher & Partners

“The efforts of the ‘A Fair Tax on Flying’ campaign is to be applauded.” Dale Keller, UK chief executive, Board of Airline Representatives (BAR)

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