Cut in air passenger duty in Autumn Budget unlikely, predicts accountancy firm

Chancellor's annual budget due on 22 November, but those hoping for lower tax on flights shouldn't hold their breath.

Image credit: iStock
Image credit: iStock

Relief for event planners in the form of a cut in air passenger duty in this year’s Autumn Budget is unlikely, according to UK accountancy firm MHA MacIntyre Hudson.

The budget is due on 22 November, with early predictions being made for a cut in stamp duty for first-time home buyers and many hoping for an increase in spending on public services.

Rajeev Shaunak, head of travel & tourism at MHA MacIntyre Hudson says those in the events industry who are budgeting for flights in 2018 shouldn’t expect a tax cut.

"The fall in the value of sterling means holiday prices are up for 2018 which, together with Brexit worries, has led to speculation that it won’t be a great year for the travel industry," he said.

"The industry has been demanding a cut in air passenger duty for several years. The airlines and some trade associations believe the tax reduces demand as people departing UK airports pay several times more than in other EU countries, where only a small proportion actually charge departure duties. However, this may be a difficult argument to win.

"APD generates approximately £3 billion for the UK treasury and any reduction would impact other politically sensitive areas such as health, education and social services. There’s also a danger that if the tax is cut, airlines, already under pressure from increasing oil prices, will simply raise fares. This will leave passengers, and the industry, no better off."

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