Costly air passenger tax is losing UK tourism £1bn a year

Julian Harris
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THE UK is losing £1bn in tourism revenue every year as a result of air passenger duty, the Tourism Alliance will reveal today.

The finding comes a week after competing airlines formed a rare united front to lobby Westminster to scrap the tax.

Passengers have to pay between £24 and £170 in the duty, considerably more than when the tax was introduced in 1994.

In the Netherlands a similar levy was scrapped after the damage to tourism was found to be greater than the revenue raised for the government.

The cost of visiting the UK has risen by 4.4 per cent as a result of the tax, the Tourism Alliance claimed -- knocking 5.7 per cent off the UK’s annual earnings from inbound tourism.

While income has still come in at £16.8bn, it would have been £17.82bn without the tax, the group found.

Four of the UK’s biggest airlines also claimed last week that the Treasury loses more money than it gains from the air passenger duty.

The stakes for a recovery in tourism are high. The government has named the sector as one of the bastions of the economic recovery, and yesterday the British Bankers’ Association said hotels and restaurants have started to borrow again.