Air Passenger Duty: rates from 1 April 2025 to 31 March 2026
Published 30 October 2024
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This publication is available at https://www.gov.uk/government/publications/changes-to-air-passenger-duty-rates-from-1-april-2025/air-passenger-duty-rates-from-1-april-2025-to-31-march-2026
Who is likely to be affected
Airlines and other aircraft operators and their passengers.
General description of the measure
The measure sets the rates of Air Passenger Duty (APD) for the year 2025 to 2026 as announced at Spring Budget 2024. Rates will increase in line with the forecast retail price index (RPI) and the standard and higher rates will be further adjusted to partially account for recent high inflation.
Policy objective
As announced at Spring Budget 2024, this measure ensures that APD receipts keep more in line with inflation, following an exceptional period where APD rates have fallen in real terms due to differences between forecast and actual RPI inflation. They also ensure that airlines and other aircraft operators continue to make a fair contribution to the public finances.
Background to the measure
The previous government announced APD rates for the year 2025 to 2026 at Spring Budget 2024 to give industry sufficient advance notice of changes. APD is one of a very small number of taxes where rates are set more than a year in advance, using forecast RPI.
Detailed proposal
Operative date
The rates for the tax year 2025 to 2026 will have effect in relation to the carriage of chargeable passengers on or after 1 April 2025.
Current law
Section 30 of Finance Act 1994 sets out the rates of APD.
Proposed revisions
Legislation will be introduced in Finance Bill 2024-25 to amend section 30 of Finance Act 1994. The rates will be as follows:
From 1 April 2025
| Bands (distance in miles from London) | Reduced rate (lowest class of travel) | Standard rate (1) (other than the lowest class of travel) | Higher rate (2) |
|---|---|---|---|
| Domestic band | £7 | £14 | £84 |
| Band A (0 to 2,000 miles) | £13 | £28 | £84 |
| Band B (2,001 to 5,500 miles) | £90 | £216 | £647 |
| Band C (over 5,500 miles) | £94 | £224 | £673 |
(1) If any class of travel provides a seat pitch in excess of 1.016 metres (40 inches) the standard rate is the minimum rate that applies. (2) The higher rate applies to flights aboard aircraft of 20 tonnes and above with fewer than 19 seats.
Summary of impacts
Exchequer impact (£ million)
| 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 |
|---|---|---|---|---|---|
| — | + 100 | + 105 | + 110 | + 115 | + 125 |
These figures are set out in table 5.2 of Autumn Budget 2024 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Spring Budget 2024.
Economic impact
This measure is not expected to have any significant macroeconomic impact.
The costing includes a behavioural effect to account for the change in flights taken resulting from the change in the tax rates.
Impact on individuals, households and families
APD is a tax on airlines and aircraft operators. The government’s understanding is that airlines and aircraft operators ordinarily pass the cost of APD through to the consumer in prices, although this is a commercial decision for the airline or operator. This measure may therefore impact individuals who travel by air, who may see an increase in air fares. Those individuals who travel in a non-economy class and by larger, more luxurious private jets may see a bigger increase.
Customer experience is expected to stay broadly the same because this measure does not change how individuals interact with HMRC.
This measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that this measure will have any impacts on those in groups sharing protected characteristics. APD is a tax on airlines and aircraft operators. The government’s understanding is that airlines and aircraft operators ordinarily pass the cost of APD through to the consumer in ticket prices. This is a commercial decision for the airline and aircraft operator. The government has limited evidence on the characteristics of people purchasing airline tickets. However, given the scale of the proposed rate changes, any impact is expected to be small.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on approximately 600 airlines and aircraft operators. One-off costs include familiarisation with the changes and updating systems to include the new rates. It is not expected that there will be any continuing costs.
There is expected to be no impact on civil society organisations.
HMRC customer experience is expected to stay broadly the same because this measure does not change how businesses interact with HMRC.
Operational impact (£ million) (HMRC or other)
HMRC will not incur any costs making these changes.
Other impacts
We expect the measure to have a negligible impact on the environment. Other impacts have been considered and none has been identified.
Monitoring and evaluation
The measure will be monitored through information collected from receipts and APD returns.
Further advice
If you have any questions about this change, contact Ann Little by:
- telephone: 03000 586 096
- email: ann.little@hmrc.gov.uk