Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made a recent assessment of the international competitiveness of Air Passenger Duty rates.

Air Passenger Duty (APD) applies to airlines and is the principal tax on the aviation sector. It is expected to raise £4.2 billion in 2024-25.

At Autumn Budget 2024, the Government announced APD rates for 2026-27, including a partial adjustment to help compensate for two recent years of inflation that was higher than expected. APD rates are set in advance using forecasts of inflation, and so with actual inflation being significantly greater than forecast in 2022 and 2023, APD rates fell in real terms.

The Government is clear that APD is an appropriate tax that ensures airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. Other countries also have different forms of aviation taxes.

The Government keeps all taxes under review.