Find out if you have to pay Air Passenger Duty, the rates and how to register and submit returns.
You need to register and pay Air Passenger Duty (APD) if you operate a fixed wing aircraft from any UK airport that:
- weighs 5.7 tonnes or more
- is fuelled by kerosene
- carries passengers whether they’ve paid for the flight or not
You can register any time before your flights begin. The latest you can register is 7 days after a chargeable flight takes place. If you don’t register, HM Revenue and Customs (HMRC) may issue you with a penalty.
If your business is based outside of the UK, you must appoint a fiscal representative. This can sometimes be just for administrative purposes. If you don’t appoint someone, your handling agent may be made jointly and severally liable for future debts. You may also be issued with a penalty.
You need to complete and return Air Passenger Duty form APD1 to register.
Notify changes or cancel your registration
If any of your business registration details change you must notify HMRC within 30 days (or within 7 days for fiscal representative changes). You should provide as much supporting information as possible.
You should return your certificate of registration with any amendments clearly marked and signed to the APD Central Collection Unit.
If you cease to operate chargeable flights you must notify HMRC in writing.
Making 12 or fewer flights a year
If you’re likely to make 12 or fewer flights a year from UK airports and your estimated duty liability for a year is less than £5,000 you may be eligible for the Occasional Operator Scheme.
If you’re eligible for this scheme you:
- don’t have to register for APD in advance
- can pay APD for flights made over a 24 hour period by completing the combined registration and notification form within 7 days of the departure date
You pay APD for each chargeable passenger you carry. The passenger will fall into a specific tax band dependent on their final destination.
Until 31 March 2015 there were 4 destination bands (A,B,C and D).
From 1 April 2015 there are only 2 bands. Band A remains the same and all other destinations have been merged into band B.
For each band there are 3 rates of duty, depending on the passenger’s class of travel:
- reduced – applies to passengers that travel in the lowest class of travel, unless their seat pitch is more than 40 inches
- standard – applies to passengers in any class other than the lowest class of travel or where seat pitch is more than 40 inches (unless higher rate conditions are met)
- higher – applies to passengers that travel in an aircraft that weighed more than 20 tonnes and is equipped to carry fewer than 19 passengers
Private jets can use a different method to measure seat pitch.
There are some people and flights exempt from APD. A full list of exemptions is provided in Excise Notice 550: Air Passenger Duty.
The exemptions that apply to children changed on 1 May 2015.
Rates for flights leaving from Northern Ireland
There are different rates that apply for passengers on certain flights leaving Northern Ireland airports.
How to calculate your liability
You calculate your duty liability by:
- working out the number of passengers carried to each destination band (deducting any that are covered by an exemption)
- identifying the class of travel for each and whether they were carried in an aircraft that attracts the higher rate
- applying the relevant rate to this number to arrive at the amount of APD due
Special accounting schemes
If you can’t calculate your APD based on actual passenger numbers from your existing systems you may need to use a ‘special accounting scheme’. Before you can use this type of scheme, you must have HMRC approval.
Records you must keep
Usually, you’ll need to keep business records for 6 years and they’ll need to be available for HMRC to see them whenever necessary. You can use any format as long as copies can be easily produced.
The records you must keep must demonstrate that the amount you’ve declared on your return is a true and fair account of your APD liability.
As well as your normal business records, you need to keep:
- an APD account detailing the monthly summary of passengers carried and the APD due
- other specific records such as documents proving passengers aren’t chargeable for any reason, flight interruption manifests etc
You may also need to keep additional records if you are allowed to work out your duty using a ‘special accounting scheme’.
Returns and payments
HMRC will send you or your fiscal representative a return, usually monthly, once you’re registered. You should complete and send back the return with payment for any duty due.
Your deadline for submitting the return will be on the front of the return. Your payment must also be received by this date. If the deadline is a bank holiday or weekend, the return and payment should reach HMRC by the last working day before the deadline.
If your return and payment are late, HMRC may issue a penalty.
HMRC can ask you to pay a cash deposit or bond if they think there’s a risk you won’t pay your tax or duty on time.
If you make a mistake, HMRC has issued guidance on how you can correct errors on returns.
If the amount you pay is later found to have been incorrect and too low, HMRC will charge you interest. Depending on the circumstances of the mistake, you may also be issued with a penalty.
An annual accounting scheme is available, which lets you make just one return each year. To qualify for the scheme the annual total of APD your business is likely to pay must be £500,000 or less.
To apply write to the APD Central Assurance Team.
Appeal a penalty
HMRC will look at your case on an individual basis if you have a reasonable excuse for making the error. If it agrees you have a reasonable excuse, you won’t have to pay the penalty.
Read Excise Notice 550: Air Passenger Duty for more information about APD.