The Chancellor’s Autumn 2022 Statement was predominantly quiet about the UK’s aviation sector. If anything, the Statement was notable more for the things that it did not say.
Over the years, Air Passenger Duty (APD) has proven to be a well-used tool for Chancellor’s looking to raise additional revenues from the UK’s air passengers. Before COVID-19, revenues from APD had risen strongly over time, and the tax had seen various tweaks to its rates and scope.
The Autumn 2021 Budget announced an overhaul of Air Passenger Duty (APD) with the introduction of a new ‘ultra-long haul’ tax band for flights to countries with capitals over 5,500 miles from the UK from April 2023, along with a 50% cut in the rate for Domestic flights.
Following the flurry of changes in 2021, in contrast, the Autumn 2022 Budget has been silent on APD; the rates will remain unchanged in nominal terms except for the changes already to be introduced as a result of the Autumn 2021 Budget.
Recent sector hopes for movement on VAT-free international shopping, historically perceived as a bonus reason for people to choose to visit the UK, received no encouragement from the Chancellor. Scrapped by Rishi Sunak in 2020, Kwasi Kwarteng had proposed to reintroduce the measure in his brief spell in post, but this was reversed as one of the new Chancellor Hunt’s first actions, and as a consequence, it was no surprise when VAT-free shopping did not appear in the new Budget
