A “double inflation” rise in Air Passenger Duty (APD) will be a jolt to London businesses, senior figures in the travel industry have said.
Shadow Chancellor George Osborne is expected to announce a 10 per cent tax hike in his autumn statement.
The hike, which should have come to force in March, was deferred and is expected to be implemented next year.
Londoners flying abroad on business paid £58m in tax last year, and foreign executives coming to the capital for business paid the Treasury over £73m, according to aviation tax campaigners Fair Tax on Flying Alliance.
Speaking about the flight taxes, Simon Buck, chief executive of the British Air Transport Association, told LondonlovesBusiness.com: “At a time where London businesses are facing the highest rate of tax in the world, imposing more flight taxes is appalling. How does the government expect businesses to revive the economy where meeting clients face to face will burn a hole in the pocket?
“I think George Osborne should really consider cancelling the announcement of the double inflation rise in air passenger tax as it would be very damaging for businesses in the capital,” he added.
Last week, CEO of International Airlines Group Willie Walsh called on the government to “get weaned off the revenue raised by the Flying Poll Tax”. He also asserted that “APD is having a hugely negative impact on the economy.”
Travel association ABTA’s head of public affairs Luke Pollard agrees with Walsh about the APD concerns.
“We should all be worried as Willie Walsh. APD not only affects air travellers, it acts as an obstacle for the entire economy as it makes international trade harder.
“Britain isn’t alone in having a flirtation with flight taxes. But we are alone in hiking them year after year after year to a point where it severely damages our economy,” he said.
Speaking about the tax hike, Darren Caplan, chief executive of the Airport Operators Association (AOA) said:
“In these tough economic times, high levels of Air Passenger Duty are pricing people out of flying, whether business people, holidaymakers and travellers visiting friends and family. It is also a disincentive for anyone wishing to come to the UK, whether business passengers or inbound tourists.
“The Airport Operators Association supports the Fair Tax on Flying coalition’s campaign, urging the Government to reduce the current shockingly high levels of APD in every part of the UK, to ensure UK airports can play their essential role in the economic recovery. These reductions should take place at the earliest possible opportunity,” he added.