MPs show APD concern as rate sets to go up
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A recent ABTA survey has found MPs are increasingly concerned about the impact of Air Passenger Duty after it was confirmed the tax will rise with inflation next April.
Around 52% of MPs told the association they think the fee is affecting the UK as an air hub, with six in 10 Conservative MPs believing it puts businesses at a disadvantage.
Yesterday George Osborne made no comment on APD in his autumn statement, meaning APD could rise up to GBP100 in economy class on some flights next April.
“It’s very disappointing that the Chancellor has once again chosen not to conduct a proper review of APD. It’s clear that there is strong support for a review both from within government and from the public, as well as evidence from Europe that the tax is damaging. Earlier this year the Irish government abolished its version of APD, joining many other European countries in doing so, as they realised the tax was doing more harm than good to the economy,” said Mark Tanzer, chief executive of ABTA.
Meanwhile the British Hospitality Association (BHA) applauded the news that it will be cheaper for businesses to employ young people.
Abolishing National Insurance contributions for under 21s will help companies take on younger people for work, something the BHA has been working towards with its campaigns.
“The abolition of NI contributions for those starting out is welcome news and will surely stimulate job creation in both the hospitality sector and beyond. The commitment of the hospitality and tourism industry to creating jobs and supporting young people is evident in the British Hospitality Association’s Big Hospitality Conversation which has shown the potential of creating new jobs, apprenticeships and work placements for young people, and increasing hospitality employment to 3 million by 2020,” said the BHA’s CEO Ufi Ibrahim.
The Cut Tourism VAT campaign was not so pleased with Osborne’s statement, saying the chancellor has “missed an opportunity” to reduce tourism VAT and boost export earnings as a result.
“The government has missed out on a great opportunity in this Autumn Statement. The United Kingdom remains alongside Slovakia, Denmark and Lithuania as the only EU member states with no reduced rate for tourism,” said the campaign’s chairman Graham Wason.
“The chancellor spoke about boosting our exports – especially in the emerging markets – and tourism can play a huge role here. However it will be hard to compete as the only sector where VAT is applied on export earnings.”
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