APD puts UK businesses at a competitive disadvantage when trying to compete on a global stage

peter-fankhauser_tc_board_2016-230Paul Wait,
Chief Executive, GTMC

At a time when there’s much talk on how to best to secure the future growth of British companies, it seems clear that halving Air Passenger Duty (APD) will have immediate benefits.

Whilst we welcomed the government’s decision last year to simplify elements of the APD classifications, making it easier to do business in key long-haul growth markets, it remains a confusing and contentious issue for business travellers.

From speaking with our GTMC members, we know APD puts UK businesses at a competitive disadvantage when trying to compete on a global stage – a fact that, ultimately, impedes wider GDP growth.

In a recent survey, over half (51%) of the business travel professionals we spoke to told us they would fly more frequently if APD was less complicated or, ideally, eliminated entirely.

Creating a level playing field would certainly help stimulate economic growth and there is evidence from around the world which suggests that abolishing the tax here would help give British businesses a welcome boost.

As things currently stand, the UK has the highest flight tax in Europe and among the highest in the world.  If the disparity in taxation between the UK and our European neighbours continues, it is likely that the practice of ‘multi-ticketing’ – whereby passengers travel via European hubs to actively reduce the amount of APD they are subject to – will become more widespread. This is a trend that has become especially prevalent in the north of England, with 41% of business travellers admitting they regularly use multi-ticketing to reduce travel costs.

In supporting the campaign to make flying fair, we call on the government to readdress the balance between APD revenue and the longer term economic potential. Until then, APD will continue to suffocate business growth.

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