Millions of holidaymakers are set to rush to book getaway flights in the next 48 hours ahead of a rumoured tax increase.
British passengers are expected to book their next holiday to avoid the anticipated Air Passenger Duty (APD) increase – also known as the ‘holiday tax.’
It is set to be announced in the government’s Budget on Wednesday, although ministers have remained tight-lipped about the exact measures.
But ministers have refused to confirm whether Labour’s pledge not to raise income tax, VAT or national insurance will remain in place for the next five years.
The government said it faces a £22 million deficit – and one of the solutions available to Chancellor Rachel Reeves to fill the coffers is the Air Passenger Duty.
More than a third (39%) of British passengers could book their flights today and tomorrow to avoid the ‘holiday tax’ targeting flights out of the UK, a study by package holiday specialist On the Beach revealed.
Zoe Harris, chief customer officer at On the Beach said that if the tax increases, the price of flights ‘will go up and holidays will be more expensive.’
She continued: ‘A further increase would be a kick in the teeth to millions of Brits whose pockets are set to be punished for going away on holiday for a week.
‘We’re expecting millions of Brits to try and beat the increase by booking their summer holidays in the next 48 hours.’
According to the research, 35% of passengers said they are worried about not being able to afford their holiday if the APD rises. One in ten said the increase will price them out and they won’t go on a holiday abroad next year.
The nation is holding its breath to see who will see a tax increase and who won’t.
Prime Minister Keir Starmer has been at the heart of controversy after his statement on who is considered a ‘working person.’
The PM told Sky News last week he didn’t consider those who received their income from assets such as shares and property to come ‘within my definition.’
Education Secretary Bridget Phillipson was quizzed on the government Budget proposal on Sunday morning.
She refused to confirm the measures ahead of Wednesday, but she said working people will not see higher taxes ‘on their payslips.’
She told BBC’s Sunday with Laura Kuessberg: ‘What I’m saying is that when people look at their pay slips, they will not see higher taxes.’
The APD is paid by each plane passenger departing from a UK airport to any destination, whether domestic or abroad.
It varies based on the length of the flight and the class, so longer flights in business class will usually cost more.
At the moment, the APD for domestic flights is £7 and £13 for short-haul flights.
The Air Passenger Duty went up last April under the Conservative government.
Domestic class economy flight rate rose by 50p from £6.50 to the current £7. Short-haul duty increased by £2 per seat, while duties on long-haul flights of up to 5,500 miles went up from £194 to £216 – an 11% rise.
Tax experts predict that if the APD increases, the additional money might be directed to encourage more environmentally friendly transport options such as train journeys.
However, some airports are exempt from the Air Passenger Duty.
This includes the Scottish Highlands and Islands region and long-haul flights from Northern Ireland.
On the Beach predicts that these airports – including Inverness – could see an increase in passenger numbers next year if the APD is increased on all other flights.
Last week, Ryanair chief Michael O’Leary threatened to axe hundreds of UK flights after the rumoured APD increase emerged, MailOnline reports.
He said: ‘If they raise APD again on domestic flights then there will be a cut in capacity, no question.
‘These routes are not particularly profitable, they barely break even. APD is a penal tax on the poor. The rich don’t care.
‘In a post-Brexit environment, the UK needs to stimulate inward tourism.’
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