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This year has proven to be an exceptionally tough year for the travel sector, with cruise lines, airlines and various travel companies being forced to halt their operations earlier in the year. The sector has lost millions with many travellers rightfully requesting refunds when their holiday plans were cancelled due to the coronavirus pandemic. Now, it seems that holiday costs could be set to rise in the future after Chancellor Rishi Sunak revealed that the government will be increasing Air Passenger Duty (APD).
Industry chiefs, who are still recovering from the financial strain of the pandemic, have previously asked the government for a 12-month break from APD.
But instead, the government issued a warning that it will be increasing the charge in April 2021.
Travel organisations ABTA and Airlines UK and the Airport Operators Association called for APD to be suspended.
Chief executive of ABTA Mark Tanzer said last week: “We believe the Chancellor should consider an APD cut ahead of next summer to incentivise people to book their holidays in 2021.”
Airlines UK chief executive Tim Alderslade added: “The government should bring forward a targeted package of support measures [including] a 12-month APD waiver to ensure our industry can play a vital role in the economic recovery.”
How will will it affect your holiday?
APD is a tax on passenger flights from UK airports that was first introduced in 1994.
How much APD is included in the cost of your airline ticket depends on the distance you are flying and also whether you’re flying economy or premium class.
APD is charged on each passenger at the rate for the place where their journey ends.
The government said that APD will increase for both economy and premium classes on medium and long-haul flights.
Economy medium-haul and long-haul flights will carry an additional £2 per passenger in APD taking the charge on a fare to £82.
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This means the APD on economy tickets will increase by 2.5 percent from £80 to £82.
The charge will increase by £4 to £180 on medium and long-haul seats in premium classes.
This means the tax on premium seats will increase by 2.3 percent from £176 to £180.
A family of four on a transatlantic flight could see their flights adding up to potentially hundreds.
However, there is some good news for British holidaymakers.
The short-haul flight rate will remain the same at £26 per person for premium class or £13 for those flying economy.
That means charges on short-haul economy flights to destinations in Europe will stay the same form April 2021.
Higher rates apply to planes with fewer than 19 seats such as private jets.
This currently amounts to £78 for shorter flights and £515 for longer flights.
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Long-haul direct flights from Northern Ireland and all flights from airports in the Scottish Highlands and Islands are exempt from APD.
Children under the age of two without a seat are exempt from APD – it does not matter what class they travel in.
However, if a seat is purchased, they will only be exempt in the lowest class of travel.
Children under 16 in the lowest class of travel are also exempt but not in any other class or private jets.
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