Air Passenger Duty & Tourism VAT

In the UK and around the world, business thrives in the right conditions. That’s why I have continued to call for a reduction in Air Passenger Duty for domestic flights. Currently, passengers are hit twice by the APD levy when they fly domestically – on take-off and landing.

This is unfair on passengers, unfair on businesses and unfair on airlines that are domiciled in the UK.

In November, before the Chancellor’s Budget, I raised the issue of the unfairness of domestic APD when we met to discuss my Budget Submission. I have asked numerous Parliamentary Questions on the issue and have met with the ‘A Fair Tax On Flying’ campaign.

I have also proposed that less-polluting airlines, who take the environment very seriously, should be incentivised with a lower APD rate. This would particularly help Exeter Airport, which is adding new routes to Europe each year.

Research by PWC shows that ADP abolition could boost UK GDP by .46% in the first year, with ongoing benefits up to 2022. The increased economic output associated with the abolition of ADP could lead to the creation of 61,000 jobs by 2022.

According to the Cut Tourism VAT campaign, a reduction of tourism VAT to 5% would contribute an extra £4.6bn in extra revenue to the Treasury and create 121,000 jobs over 10 years. Devon’s economy is powered by, among other things, vast levels of tourism, especially during the summer months. The UK is one of four EU countries not to make use of the possibility of a 5% VAT on tourism. If the UK wants to be a competitive tourist destination post-Brexit, it should at least be in line with other low-tax EU countries on tourism.