Air Passenger Duty: rates
Published 16 March 2016
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Who is likely to be affected
Airlines and other aircraft operators, and their passengers.
General description of the measure
The rates of Air Passenger Duty (APD) for the tax years 2016 to 2017 and 2017 to 2018 will increase in line with the Retail Price Index (RPI).
Policy objective
This measure increases APD rates and therefore contributes to the government’s deficit reduction objectives.
Background to the measure
The rates for the tax year 2016 to 2017 were announced at Budget 2015. The rates for the tax year 2017 to 2018 are being announced at Budget 2016 to give the industry sufficient advance notice of changes in APD rates.
Detailed proposal
Operative date
The rates for the tax year 2016 to 2017 will have effect in relation to the carriage of chargeable passengers on or after 1 April 2016.
The rates for the tax year 2017 to 2018 will have effect in relation to the carriage of chargeable passengers on or after 1 April 2017.
Current law
Section 30 of Finance Act (FA) 1994 sets out the rates of APD.
Proposed revisions
Legislation will be introduced in the Finance Bill 2016 to amend section 30 of FA1994. The rates will be as follows:
From 1 April 2016
| Bands (distance in miles from London) | Reduced rate (lowest class of travel) | Standard rate (1) (other than the lowest class of travel) | Higher rate (2) |
|---|---|---|---|
| Band A (0 – 2000 miles) | £13 | £26 | £78 |
| Band B (over 2000 miles) | £73 | £146 | £438 |
From 1 April 2017
| Bands (distance in miles from London) | Reduced rate (lowest class of travel) | Standard rate (1) (other than the lowest class of travel) | Higher rate (2) |
|---|---|---|---|
| Band A (0 – 2000 miles) | £13 | £26 | £78 |
| Band B (over 2000 miles) | £75 | £150 | £450 |
(1) If any class of travel provides a seat pitch in excess of 1.016 metres (40 inches) the standard rate is the minimum rate that applies.
(2) The higher rate applies to flights aboard aircraft of 20 tonnes and above with fewer than 19 seats.
Summary of impacts
Exchequer impact (£m)
| 2016 to 2017 | 2017 to 2018 | 2018 to 2019 | 2019 to 2020 | 2020 to 2021 |
|---|---|---|---|---|
| nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any economic impacts.
Impact on individuals, households and families
As APD is not a direct tax on individuals, there are no compliance or administration costs attributable to them. Therefore this measure is not expected to have an impact on individuals, households and family neither is it expected to impact on family formation, stability or breakdown.
Equalities impacts
This measure will impact on those who travel more by air. Some protected characteristics are likely to be over represented in the class of people who travel by this means.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on businesses and civil society organisations. Those businesses affected by the rate change will incur a negligible one-off cost to update their systems. There are not expected to be any additional on-going costs.
Operational impact (£m) (HM Revenue and Customs (HMRC))
Costs to HMRC of implementing this change are expected to be negligible.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
HMRC will assess the impact of the measure by monitoring receipts and information collected on tax returns.
Further advice
If you have any questions about this change, please contact Ann Little on Telephone: 03000 586096 or email: ann.little@hmrc.gsi.gov.uk.