TAXES AND REFUNDS ON FLIGHT TICKETS

If an individual books a flight ticket for either self or family then he/she is eligible for a refund on the Air Passenger Duty (APD) provided they do not actually fly. If you are an employee and are travelling then there are certain subsistence expenses that can be claimed. Introduced in 1994, APD was considered as a tax for the environmental cost of air travel. The motive behind this was to make passengers realise and give air travel a second thought – it raised about £3 billion in revenue every year. Air Passenger Duty was scrapped on 1st May 2015 for children under 12, and later was abolished on 1st March 2016 for children between 12 and 16 years of age

APD is payable by just about all passengers who take a flight from the UK airport whether it be inland or for overseas. However, there are certain foreign business travel expenses and allowances which are considered by the HMRC. Currently, APD falls in the range of £13 for economy-class, and £150 for first-class. APD is paid by individuals on booking, and is only collected by tax authorities from airlines when an individual actually takes the flight. APD is not levied on children under 16 years of age

Who are responsible for APD payment

APD is charged against each passenger taking a flight from the UK – it doesn’t apply if an individual is traveling back to the UK. Also, an individual doesn’t have to pay APD if he/she is just shifting flights in the UK (en route to some other place ) as long as the time duration between the two flights is within 24 hours

APD and rates

Back in 1994, it began at a charge of £5 for an individual taking a short-haul flights and £10 for an individual taking a long-haul flights. However, since these initial days, APD has been increased frequently by successive governments and is subject to changes again on 1st April 2018. Below mentioned stats provide information on the rate change:

APD rates from 1 April 2018

APD rates from 1 April 2017

Air Passenger Duty (APD) rates for flights coining in Northern Ireland

The below mentioned table shows APD rates for flights originating from airports in Northern Ireland. No APD is paid on direct long-haul flights departing from airports in Northern Ireland. A flight is a ‘direct long-haul flight’ when:

• the initial phase of the journey is to a destination in Band B
• a phase or journey itself is direct and doesn’t connect somewhere else earlier
• the passenger starts the journey from an airport in Northern Ireland

APD rates for flights originating in Northern Ireland from 1 April 2018

APD rates for flights originating in Northern Ireland from 1 April 2017

How can an individual avoid paying APD

Well, there are a few ambiguities. If an individual is taking a flight from Northern Ireland, he/she won’t have to pay any amount as APD for long-haul flights. However, this only applicable for direct flights – short-haul flights are subject to APD of £13 for economy and £26 for other classes. Likewise, all airports, the biggest of which is Inverness, in the Scottish Highlands and Islands are exempt. Hence, for example, if an individual wanted to get to Florida without paying any APD, he/she can possibly fly from Inverness to someplace like Amsterdam, and from there get a connecting flight. The cost of journey is debatable as it depends on the cost of the ticket at that very moment

Additionally, if an individual stays in Scotland, then there’s a good chance that the fare will be less. As part of the devolution process, from 2018 the Scottish Parliament will be empowered to control the APD rate for Scottish airports. According to SNP ministers, they plan to reduce the rate by 50% to promote more visitors, but this is still in process and the outcome is awaitedAdditionally, if an individual stays in Scotland, then there’s a good chance that the fare will be less. As part of the devolution process, from 2018 the Scottish Parliament will be empowered to control the APD rate for Scottish airports. According to SNP ministers, they plan to reduce the rate by 50% to promote more visitors, but this is still in process and the outcome is awaited

How do an individual receive an APD refund?

If an individual is charged with APD on a ticket for a child whose age is under 16 after 1st March 2016 then in such a scenario an individual will be eligible for a refund. As an initial step, an individual can contact the airline or travel agent who had booked the flight for a refund. Alternatively, an individual can inform airlines or an agent about the age of the child when they travel before he/she books a flight –update the airlines or agent before cash is handed over and by doing so a lot of legwork is saved trying to get a refund later on

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.