Osborne freezes APD

by Jessica MCILHINNEY on March 24, 2011

As expected, Chancellor George Osborne handed down a reprieve to cash-strapped holidaymakers last night by announcing that Air Passenger Duty will be temporarily frozen in the Budget. The tax, which can add as much as £240 to a family holiday to Florida, has been delayed until April 2012.

The increased, which was originally planned to come into force in November after a hefty tax rise last year, has been shelved under pressure from campaigners and the travel industry. APD in the UK is almost nine percent more than the European average as has increased in line with inflation every year since 2007.

As it is set at the moment, APD adds around £85 onto a flight to Australia, £60 to the US and £12 on European trips in economy class. Business and first class tickets also carrier higher charges.

The move, which will save sun-seeking families a packet, is expected to cost the government about £150 million this year. For the first time ever, Osborne also announced that APD would be imposed on luxury travel such as private jets in an attempt to offset the loss.

APD first came into force in the UK in 1994 when it would cost passengers £5 extra per flight in the European Union and £10 extra for destinations farther afield. New bands were introduced in 2009, however, when the amount of tax would be based on the distance between the capital cities of the two countries.

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