Air Passenger Duty – a green way to increase taxes?

Air Passenger Duty (APD) has been around since 1994. It is a tax on flights, paid by passengers, collected by airlines and paid over to the Treasury so the cost of collection to the Treasury is very low.

It began at the rate of £5 per person on European flights and £10 on long haul flights. Since 1994 it has increased steadily, usually in line with inflation and for the year starting 1 April 2024 it is:

• UK domestic £7 economy and £14 higher rate per person for premium economy and higher grades
• Band A flights that are 2,000 miles or less from London £13 or £26
• Band B flights between 2,001 and 5,500 miles from London £88 or £194
• Band C flights that are more than 5,500 miles from London £92 or £202

Private jets are treated much more punitively with rates of tax between £78 and £607 per person. Much has been written about the sheer number of private jet flights taken by celebrities like Elon Musk and Taylor Swift. I am not here to bash celebrities but could APD for private jets be a justified target for the new government to increase its tax take whilst showing its green credentials?

According to Greenpeace there were 90,000 private jet flights taking off in the UK in 2022 emitting half a million tonnes of CO2 – more than in any other European country. One in ten flights taking off from a UK airport in 2022 was a private jet.

I doubt that doubling or even tripling the APD on private flights would have much effect on the number of private jet flights leaving the UK and it seems like an easy win for the government. Taxing private flights heavily per flight rather than per passenger could bring in substantially more tax.

Total APD receipts in 2023/24 were £3,845 million, an increase of 21% on the previous year. It pales into insignificance when compared to VAT receipts which were £169 bn in the same year but when the government is looking for ways to fill the purportedly £22bn ‘black hole’, it might be able to find £1bn of that from APD.