Changes to Air Passenger Duty rates from 1 April 2021
Published 11 March 2020
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Who is likely to be affected
Airlines and other aircraft operators, and their passengers.
General description of the measure
The long haul rates of Air Passenger Duty for the tax year 2021 to 2022 will increase in line with the retail price index (RPI) as forecast at Budget 2020. Short haul rates will not rise.
Policy objective
This measure increases Air Passenger Duty rates in line with RPI, constituting a real terms freeze. This contributes towards the government’s public finances.
Background to the measure
This measure was announced at Budget 2020.
The rates for the tax year 2021 to 2022 are being announced at Budget 2020 to give industry sufficient advance notice of changes in Air Passenger Duty rates.
Detailed proposal
Operative date
The rates for the tax year 2021 to 2022 will have effect in relation to the carriage of chargeable passengers on or after 1 April 2021.
Current law
Section 30 of Finance Act 1994 (FA 1994) sets out the rates of Air Passenger Duty.
Proposed revisions
Legislation will be introduced in Finance Bill 2020 to amend section 30 of FA 1994. The rates will be as follows:
From 1 April 2021
| 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) | £82 | £180 | £541 |
(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
| 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 |
|---|---|---|---|---|---|
| - | - | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
This measure will impact on some individuals, households and families who travel by air. There is no impact on the majority of passengers who travel to short haul destinations. Those who travel to long haul destinations may see an increase in price. The increase is in line with RPI, constituting a real terms freeze.
Customer experience is expected to stay broadly the same because this measure does not change how individuals interact with HMRC.
This measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
This measure will impact on those who travel more by air. Some people with 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 approximately 1500 airlines and aircraft operators. One-off costs include familiarisation with the new rates and updating systems to include the new rates. It is not expected that there will be any ongoing costs. There is no impact on civil society organisations.
Customer experience is expected to stay broadly the same because this measure does not change how businesses interact with HMRC.
Operational impact (£m) (HMRC or other)
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
The measure will be monitored through information collected from receipts and Air Passenger Duty returns.
Further advice
If you have any questions about this change, contact Ann Little on Telephone: 03000 586096 or email: ann.little@hmrc.gov.uk.