Air Passenger Duty freeze: UK travel industry wants children exempt

The travel industry is asking the government for an Air Passenger Duty freeze in the UK, and for children to be taken out of the tax altogether. Abta, the travel association, made the call on Monday 12 October as it published a new report on outbound travel. Nothing has changed yet for anyone booking a flight, but the Budget is only weeks away.

Abta’s chief executive, Mark Tanzer, wrote in Travel Weekly that “some of the biggest costs for families going on overseas holidays are imposed by government”, including APD. He described it as the highest departure tax in the developed world.

The Air Passenger Duty freeze, in plain English

Air Passenger Duty is a tax charged on flights leaving the UK. Abta’s Budget asks, as set out in its report, are for a freeze in APD “over the lifetime of the parliament” and the removal of all children from the tax. A freeze would mean the duty does not rise during that period. Removing children would mean no APD on flights taken by under-age passengers.

Abta says this would help families with the cost of holidays and also help the industry to grow. The association launched the report, titled ‘Outbound Travel – driving jobs and growth across the UK’, at its Travel Convention in Funchal, Madeira, which runs from 12 to 14 October.

The Budget is due on 28 October. Abta’s message to ministers, as reported by the Majorca Daily Bulletin, is to “work with us, not against us”. The sources reviewed contain no response from the government or HM Treasury.

Who would pay more or less

If the government adopted both asks, families flying with children would pay less in tax on their tickets. A freeze would also benefit every other leisure and business traveller, because it would hold the duty where it is. Abta’s argument is that cheaper family travel supports growth, not only household budgets.

The cost would fall on the public finances, although none of the sources puts a figure on it. For scale, Arguably notes that motoring taxes raise about £33bn a year, more than stamp duty, inheritance tax and APD combined. That suggests APD is a smaller revenue stream than the headline travel debate implies, but only the Treasury can say what exempting children would cost.

Abta also wants a review of business rates for high street travel agents, saying many businesses saw their rates rise earlier this year when Covid-era relief ended and properties were revalued. That ask would not change what holidaymakers pay at the airport, though it bears on the cost of running a shop that sells holidays.

A worked example, and how the picture compares with 2019

Abta’s figures show why it is pressing on cost. Among people who said they would spend less on holidays next year, 52% named the cost of living as the main reason, up from 47% last year. Only 15% of people said they planned to spend less, according to the report as relayed by the Majorca Daily Bulletin.

As an illustration, not an Abta figure: take 1,000 people on that basis. About 150 would plan to spend less, and 52% of them, 78 people, would blame the cost of living. On last year’s 47% share, the same 150 would have produced about 70. The shift is small in raw numbers but points the same way.

What to do now

For anyone planning a family trip, the practical advice is to avoid waiting on a Budget outcome that may not come. Abta says more people are booking close to departure, sometimes just weeks before, and Mr Tanzer called that trend “very challenging for businesses”. Leaving a booking late does not guarantee a lower tax bill, and prices can move for many other reasons.

Look at the breakdown of taxes and charges when you compare fares, so you can see what is added to the base price for each passenger. Compare the total for the whole family, not the headline per-person fare. If the Budget on 28 October does change APD, any new rules would be set out by the government, so check gov.uk or HM Revenue and Customs guidance before assuming a refund or a lower price on an existing booking.

If you are booked already, nothing in Abta’s proposals changes what you have paid. The report is a lobbying document, not policy.

Your questions answered

Are air fares going up?

The sources do not forecast fares. Abta says the industry has had a difficult year, with conflict in the Middle East affecting travel plans, fuel availability and prices, as well as wildfires and problems with Europe’s new Entry/Exit System. Mr Tanzer also referred to rising costs for travel firms. None of that amounts to a fare prediction, so check prices directly with airlines and agents.

Are children already exempt from Air Passenger Duty?

Abta’s ask is to remove “all children” from the tax, which implies it is not currently removed in every case. The sources do not set out the current rates or exemptions. Check the official rates on gov.uk for the class of travel and destination you are booking.

Will the Budget definitely change APD?

No. Abta’s requests are recommendations. Until 28 October, the position remains unconfirmed.