Expats can save some money on long-haul flights when after Chancellor George Osborne has axed the two highest rate bands.
The changes do not take effect until April 2015, but will do away with the current ludicrous tax based on the distance from the UK to foreign capital cities instead of actual destinations.
Currently, for example, a 7,000 mile flight to Hawaii costs £268 in air passenger duty (APD), while a 4,400 mile flight to Trinidad is taxed at £332 because US capital of Washington DC is closer to London than Trinidad, which is the capital of Jamaica.
Under the new rules APD will be charged on distance with any flight over 2,000 miles taxed between £67 and £268.
“From April 2015, long-haul flights will be taxed at the same rate as passengers are now paying to fly to the United States,” said Mr Osborne.
Private jets and APD
APD is charged on flights from Britain and the tax ranges from £13 to nearly £400, depending on distance and the ticket terms and conditions.
Osborne also changed the rules to include private jets.
Dale Keller, chief executive of the Board of Airline Representatives in the UK, said: “The airline industry and businesses understood that passengers departing Britain were paying the highest aviation tax in the world and the cost was stopping economic growth in emerging markets.
“We would urge the chancellor to go further still on reducing or abolishing APD, but these changes are a step along the right road and we will continue to lobby to encourage the government to make more changes.”
Saving APD on long-haul flights
Expats flying to long-haul destinations can save a significant amount on flight costs by taking a short-hop from Britain to one of the European hubs like Paris, Frankfurt, or Schiphol, Amsterdam and then switching to another flight for the long-haul section of the flight.
Just stopping for an airport transfer is not enough – APD rules only count the final destination as somewhere the passenger stops over for 24 hours or more, so expats should make sure the journey includes a break before embarking on the next flight.
Flights out of Jersey in the Channel Islands are also exempt from APD, which is a money-saving trick many long-haul passengers exploit.
So flying from Jersey to London, stopping over for 24 hours and then carrying on to Sydney means paying no APD on the trip – a saving of around £750 for a family of four.
