Europe's business aviation industry has reacted angrily to the UK government's decision to introduce air passenger taxes for private aircraft users and fears its application will persuade "aviation interests" to move offshore and some companies to move their residences/offices outside the UK.
"Only days ago [the government] said that the new budget would be 'unashamedly pro-growth, pro-enterprise and pro-aspiration', only to turn around and introduce air passenger taxes for business aviation," says the European Business Aviation Association.
"In Europe, 40% of business aircraft operators have only one aircraft and 80% have less than five, so applying the air passenger tax to this diverse sector would have a significant negative impact on the very SME [small, medium-sized enterprises] operators the UK government and the European Union is pledged to support," the Brussels-based association continues.
"Indeed to stimulate the economy with investments and employment, it is recognised to be vital that the business environment for SMEs should be made easier by reducing their administrative costs, making it easier for them to be competitive - not more difficult."
The EBAA says there is a "misperception" that business aircraft operators benefit from some sort of loophole and pay no taxes.
It says: "A heavy burden of taxation is already imposed on business aviation, including VAT at 20% and inclusion of even the smallest private jet emitter in the European emissions trading programme [ETS]" - designed to offset the environmental impact of aviation across Europe.
"Whilst airlines are also included in ETS, they will receive more than 90% of their ETS credits completely free of charge based on historical emissions and passenger loads. Business aviation, on the other hand, will have to purchase almost all its credits. With that in mind, in its initial review of air passenger duty [APD], the UK government understood that if it applied the duty to business aviation, the industry would have been hit with two environmental taxes simultaneously," says the EBAA.
Meanwhile, the Aviation Environment Federation says it welcomes the introduction of APD for private aircraft. "When ordinary people on business or leisure trips have to pay tax, it is clearly unfair and inequitable that exclusive and highly polluting private and business jets are not taxed. We therefore welcome the plan to tax them," it says.
Source: Flight International