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Tax Day: Long-haul flights could face higher UK taxes

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Lucy Harley-McKeown
·2-min read
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A passenger enters departures in Terminal 2 at Heathrow Airport in London. Photo: Luke MacGregor/Reuters
A passenger enters departures in Terminal 2 at Heathrow Airport in London. Photo: Luke MacGregor/Reuters

Passengers taking long-haul journeys from the UK could face higher taxes, under new proposals announced on Tuesday by the Treasury.

A consultation is being launched, among other changes, on a potential shake up of air passenger duty (APD).

The Treasury has said it could improve connections across the union and regions by cutting the tax on domestic flights.

The consultation is seeking views on supporting the UK’s commitment to net-zero emissions by 2050 by increasing the number of international distance bands.

This, the government has said, would reinforce the “polluter pays principle,” by ensuring that those who travel furthest internationally, and consequently have the greatest impact on the environment, incur the most duty.

The Treasury effectively ruled out a frequent flier levy, a measure which some had called for to reduce carbon emissions.

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The consultation is a measure the government had previously committed to in its 2020 budget in order to ensure that the aviation sector makes a fair contribution to public finances.

The sector contributed at least £22bn to the UK economy, along with over 230,000 jobs prior to COVID-19, and has been provided with unprecedented support over the last year, including schemes to raise capital, flexibilities with tax bills and the extended furlough scheme.

READ MORE: UK chancellor calls for countries to make mandatory climate disclosures

Chancellor Rishi Sunak also announced a number of other potential changes to tax policy on Tuesday afternoon. Dubbed "Tax Day," the Treasury has chosen to eke out its announcements on crucial fiscal policy in the wake of COVID-19 in order to allow for greater scrutiny alongside a huge roster of other measures currently on the table to balance Britain's books. More than 30 tax updates and consultations were released this afternoon.

A large number of the announcements form a key part of the government’s wider ten-year plan to build what they call a "trusted, modern tax system.

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