Treasury consulting on a Frequent Flyer Levy to tax aviation…

treasury-consulting-on-a-frequent-flyer-levy-to-tax-aviation…

Treasury consulting on a Frequent Flyer Levy to tax aviation…

Treasury consulting on a Frequent Flyer Levy to tax aviation (Treasury not keen on it)
2021-04-02 10:47:00
The Treasury has a  consultation (ending 15th June) on several aspects of the taxation of aviation. The first section was on domestic APD (Air Passenger Duty); the second part is on changes to the international APD bands  and also on a Frequent Flyer Levy (FFL). The Treasury document says:  “The Committee on Climate Change and several environmental stakeholders have suggested that the government should introduce a frequent flyer levy, in order to tackle the environmental impacts of flying in an equitable way. … A frequent flyer levy would seek to constrain overall demand for flights, by increasing the amount of tax liability due, according to the number of flights a passenger had previously taken. Unlike APD, the tax would be levied on the individual, rather than the airline.”  It stresses the various difficulties in administering the tax (a great deal of data to be collected, people with multiple passports, people who need to fly often…) It makes out that people who fly a lot already pay more APD, ignoring the key point of the FFL that the tax ramps up for each flight, so the 5th or 10th flight in one year costs a great deal more, than the standard APD rate on each. It concludes: “The government is therefore minded to retain APD as the principal tax on the aviation sector and not introduce a frequent flyer levy as a replacement, and welcomes views on this position.” .Tweet   HM Treasury. Aviation Tax Reform consultation https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/971943/Aviation_Tax_Reform_Consultation.pdf March 2021 Frequent flyer levy 4.14 The Committee on Climate Change and several environmental stakeholders have suggested that the government should introduce a frequent flyer levy, in order to tackle the environmental impacts of flying in an equitable way. 4.15 A frequent flyer levy would seek to constrain overall demand for flights, by increasing the amount of tax liability due, according to the number of flights a passenger had previously taken. Unlike APD, the tax would be levied on the individual, rather than the airline. 4.16 A frequent flyer levy would be significantly more complex to administer than APD, for both airlines and HMRC, on the basis that it could require the government to collect and store personal information on each passenger. The government would have to be able to record and identify every flight an individual took from a UK airport for the purposes of calculating how many flights they had taken within a given period. This would not only increase complexity (because of the significant increase in taxpayers) but may also pose concerns around data processing, handling and privacy. There may be additional compliance issues, particularly with passengers who were able to travel under multiple passports. It may also pose challenges for individuals who have an essential need to fly frequently. 4.17 In addition, it is important to note that airlines ordinarily pass the cost of APD onto th

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