UK moves to reform air passenger duty

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UK taxes imposed on certain long-haul flights are to be reduced from 1 April.

The two highest bands of air passenger duty (APD), currently applied to flights of more than 4,000 miles, are to be eliminated in a bid to "help British businesses strengthen links with high-growth markets", says the HM Treasury in its Budget 2014 document.

As a result, flights bound for South Asia or the Caribbean will be subject to a lower tax rate.

The Board of Airline Representatives in the UK has responded positively to the APD reform measure. "Treating all-long haul flights the same is a welcomed economic initiative from the Chancellor [George Osborne]," says BAR-UK.

“The government has finally acknowledged what the industry and business knew all along – that the highest rates of aviation tax in the world were a brake on driving the UK’s economic growth with emerging markets," adds chief executive Dale Keller. "Of course, we would like the Chancellor to go further still on reducing APD, but this is a step in the right direction."

The UK government has also revealed plans to extend the scope of its Regional Air Connectivity Fund to include start-up aid for new routes from regional airports. "We will need to evaluate any potential competitive distortion that could result," says Keller. "However, the government’s intentions are clearly supportive."