UK private jet industry faces £9m loss to APD
Contributors are not employed, compensated or governed by TD, opinions and statements are from the contributor directly
Private jet charter firm PrivateFly has criticised the Government for treating its services like airlines when it comes to paying Air Passenger Duty (APD).
Adam Twidell, CEO of PrivateFly has predicted most non-UK companies will pay the tax as private charter flight companies work very differently to a typical airline.
By assessing figures from data provider WINGX-Advance, PrivateFly has estimated the industry will lose GBP4.6 million in revenues as a result of the tax increase.
This is only half of what could be collected if non-UK companies were to cough up, with those based in the UK left to potentially pick up the costs.
HMRC has already placed a projected cost of GBP2-3 million on the private jet sector for APD which Twidell believes will cover money it expects not to collect from non-UK companies.
“The collection process for APD on business aviation was not properly discussed with the industry, with HMRC applying the same logic for airlines to the highly fragmented private jet sector. However, the makeup of the private jet industry is very different to that of the airlines: while there are around 130 airlines operating UK departures, in 2012 over 3,000 private jet companies flew into the UK, with 75% having less than three aircraft in their fleet. Routes are not scheduled and the aircraft behave like taxis,” explained Twidell.
“With the onus being on the aircraft operator to register and pay APD independently, the system is bureaucratic and difficult to understand for small private jet companies who only fly to and from the UK occasionally. The result will be many aircraft operators ignoring the tax. And with private aircraft able to use more than 300 airports in the UK, the task of tracking down non-payers will be almost impossible for HMRC.
“Many will escape their scrutiny, creating a commercial disadvantage for UK operators who must factor in the costs of paying and administering the tax,” he added.