Mediaboss Marketing

Expats are likely to be seriously affected by the Air Passenger Duty (APD) rises from next month, with the announcement of an extra eight per cent fee in two weeks' time and further increases due in 2013

Frequent flyers and expats will be hit by increased APD from April 1 2012, with rates set to increase by inflation from April 1 2013 as well. Chancellor George Osborne expects to collect 2.2billion from APD revenue in 2011/2012, rising to 3.9billion by 2016/2017.

Expats say not only do high passenger duties put them off returning to the UK for personal or professional visits, they also encourage people to look for new routes through Europe (Chicago Options: ^REURUSD - news) to reduce flight fees.

"If you fly, say, Business Class from Dubai with the family, the taxes and fees alone are more than 2,000," said Telegraph Expat blogger Annabel Kantaria. "I ask myself, 'Do I really want to go to the UK that badly?' and the answer is often no.

"This year we're flying into Spain, where the taxes and fees are a lot lower, then taking a cheap European flight over to UK in economy class, which also has much lower taxes than flying in from Dubai in Business Class."

Reuven Levitt, CEO of Tripbase.com , says it's time to get smart with your flight bookings. "Fly into the UK but on your return flight go indirect and include a stopover in Europe, preferably out from a regional airport in the UK," he said. "Business Class passengers flying Economy for one of the legs should ensure they rough it on their return flight rather than the inbound. Frequent flyers are also better off taking their chances with a last-minute upgrade rather than booking a Business Class seat in advance to avoid the higher Business Class fees."

ABTA, the body representing 1,300 members from the travel industry, said the news was "a further hammer blow to the industry".

The Chancellors confirmation that he intends to go ahead with double inflationary rise in APD on April 1, together with a further increase in 2013, is incredibly disappointing," said chief executive Mark Tanzer. "The Government has repeatedly said it looks to travel and tourism as one of its key drivers of growth but instead of listening to concerns that APD is stunting this growth, not only in travel but in the wider economy too, it has chosen to significantly increase the tax burden.

Airlines also oppose the tax increase, with the chief executives of easyJet, Ryanair, Virgin Atlantic and British Airways (Other OTC: BABWF.PK - news) -owner International Airlines Group teaming up in a joint-response, saying that APD had "no international parallel" anywhere else in the world. Currently, only five European countries levy any form of aviation tax and the UK's rate is already the highest.

The Airport Operators Association said it was "dismayed" at the APD decision, while airline chiefs described APD as a "job-destroying tax". The rise in APD come at a time when Emissions Trading Scheme (ETS), an environmental tax on aviation, is being introduced but the Government has not announced any plans to offset the revenue raised from the ETS against APD.

See the original post:
Budget 2012: expats hit in the pocket by APD