Aviation tax reform

AAT does not agree with proposals to reduce Air Passenger Duty (APD) on UK domestic flights. This is because doing so contradicts and greatly weakens government policy on seeking to reach “net zero” by 2050, flies in the face of a wealth of national and international evidence about the damaging impact of short haul flights and seriously undermines the UK’s credibility ahead of COP26 in November 2021.

Taxing flights rather than passengers would appear to better align with the government’s environmental objectives because doing so would better target the level of emissions by encouraging airlines to fill their planes. It is obviously the case that airlines ordinarily seek to fill their planes to maximise profits but where this isn’t achieved, the level of emissions remains the same.

AAT agrees that the number of international distance bands within APD should be increased because doing so will more closely align APD with the government’s stated environmental objectives as well as ensuring tax receipts continue to grow. However, rather than revert to the four bands in place until 2008 or the suggested alternative of three bands, AAT believes there may be merit in considering the introduction of a six-band system to better reflect the polluter pays principle.

AAT believes that the apparently dismissive approach taken to a frequent flyer levy is unwarranted and that instead the government should revisit the possibility and thoroughly explore its merits or otherwise before reaching any final decision. A short public consultation or call for evidence on this specific issue may be worthwhile in helping to inform government policy here.