UK looks at fuel tax & VAT

[ORAC]

The Times - February 17:
Fuel tax emerges as new weapon to curb air travel

NO NEW runways would be needed in Britain if aviation fuel was taxed at the same rate as motor vehicle fuel and air tickets were subject to VAT, government figures say.

The Government will start to consult the industry this month on a range of taxes and other economic measures designed to reduce the industry’s impact on the environment. Green groups say that the industry receives a hidden subsidy of more than £9 billion a year because of its exemption from fuel duty and VAT, and its receipts from duty-free sales outside Europe. They say that the industry’s tax status inflates demand by keeping air fares artificially low.

Last year the Government proposed building five or six new runways in Britain, including at least three in the South East, to cope with a predicted trebling in passenger numbers to 500 million a year by 2030............

However, the Government’s growth estimate, published last July, assumed that air fares would continue to fall by 1 per cent a year because airlines would not be expected to pay any extra tax. The Department for Transport has produced another estimate after making new assumptions as suggested by a coalition of environmental groups, including the Council for the Protection of Rural England and Friends of the Earth.

If a 46p per litre tax on aviation fuel and 17.5 per cent VAT on fares were phased in over the next two decades, passenger numbers would rise by only 75 per cent, from 180 million in 2000 to 315 million in 2030. Existing runways have enough spare capacity to cope with this rate of growth, though not all passengers would be able to fly from their first choice of airport and many would have to travel further to fly cheaply...............

[Hand Solo]

Perhaps they'll start charging fuel duty on farmers red diesel, that way the price increase will deter us from eating food?

I'm sure this was looked at before and dismissed by the government, partly as it was considered elitist (tax the poor out of the sky, and good riddance to the riff-raff I say!:D ) and partly because it would break several international trade agreements whilst unfairly penalising UK based airlines. Besides, if they're going to tax us at 46 p per litre I want a taxman standing by my aircraft with a thermometer to measure the temperature and calculate the tax based on the days specific volume when I uplift X000 kgs. Got to look after the pennies you know.

[WHBM]

As I understand it all public transport fuel has no fuel duty. Railways don't pay anything on their diesel. Nor do ferries. Even buses (I seem to recall) get their fuel duty back when on scheduled services.

So why compare air transport with private vehicles ?

[Localiser Green]

As I understand it all public transport fuel has no fuel duty. Railways don't pay anything on their diesel. Nor do ferries. Even buses (I seem to recall) get their fuel duty back when on scheduled services.

So why compare air transport with private vehicles ?

Nor are the fares on public transport liable to VAT.

I know... lets charge fuel duty and VAT on all train fares in the UK, that way the number of people travelling by train will halve and we can save all this money investing in line improvements.

Combined with the new taxes on airfares that will ensure we're all just driving cars and paying 46p a litre tax and £5 congestion charges to stray within 10 miles of major cities in the process.

Genius ;)

[Smokie]

So why propose a Tax on aviation fuel and not on the fuel for other forms of public transport ?

Seems like a soft option to me if they pull it off.

They'll be introducing congestion charges for all Aircraft flying with in a 10 mile radius of the centre of London next !!!

[soddim]

Hope GB is not a Times reader. If he picks up on this one he will rub his greedy little scottish hands with delight.

[411A]

Socialist dogma, personified.

Wonder how MANY more pilots this idea would put out of work?:rolleyes:

[MaximumPete]

Well, someone got to pay for the asylum seekers!

The greedy b*****ds tax you on your income, your pension at the same rate when you retire, snatch what you've got left when you need full-time healthcare in your latter years so why not tax your flying etc as well when you can get out and about.

It started with passenger tax. When will it finish??

MP:(

PS I forgot about all the other indirect taxes like VAT on the cat's grub.

[Dirty Mach]

It won't happen. operators will just fill up in France or Amsterdam or Jersey or the Isle of Man or Dublin. BP and Shell in the UK will start losing out and put pressure on the govt.

It is however typical of any government to find something that plenty of people rely on and then tax it.:rolleyes:

[bluskis]

I suspect nothing will happen. Its just another of the diversionary tactics of of a well beyond sell by date, headless chicken of a so called government.

Build more runways or we will fall behind the admirable europe. No, tax people so they cant afford to use more runways.

Don't ask how we tax the europeans so they won't fly anymore.

Don't ask pilots how they are going to vote next time.

They will all be military pilots by then.

[Send Clowns]

This is fine - as long as they give the same conditions to rail and buses: tax their fuel and give us the subsidies so we can operate all routes that anyone wants, profitable or not. The rail gets effectively open subsidy, given what they need for the political requirements of the government. Yet it is still cheaper to go by air above about 200 miles. Maybe the efficiency of air travel could be put into rail, or maybe air travel doesn't really use more resources at all?

[t'aint natural]

Come on, chaps, let's not be too dim.
I'll say it again - if you believe what you read in the papers about politics, you have to believe what you read about aviation.
If the Friends of the Hedgehog put up a document it's not untruthful to say the Government is considering it - it's constrained to do so - but it's never going to get within a hundred miles of a Green Paper.
The notion that Treasury has suddenly discovered that there's no duty on fuel, and that Brown would be 'rubbing his little Scottish hands with glee' if only he knew, is specious drivel on a par with the stories of the drunken pilots who wake from their slumbers long enough to push the wrong button before falling asleep again.
To use it as an excuse for a slow-witted rant is uncool.

[spud]

For goodness sake, just stop electing this bunch of clowns.

[Dr Dave]

Just for the record, in the UK rail receives a 100% rebate on fuel duty but buses receive 75% (80% in Scotland).

It is almost inevitable that a green tax on aviation will appear on the agenda repeatedly over the next few years. The latest IPCC report on the impact of subsonic aviation stated that it is currently responsible for 3% of anthropogenic radiative forcing (the greenhouse effect if you like), rising to about 5% in 2050.

See:
http://www.grida.no/climate/ipcc/aviation/008.htm

It will of course be very difficult to find a way to implement such a tax in an equitable way though.

Dave

[NAV GREEN]

Yet another half baked idea by an out of control government.

Could you imagine the consiquences of such a move, the country would be flooded with foreign operators enjoying their tax free EU status as thousands of UK pilots are made redundant as the airlines fold.

I don;t think it would happen but if it does the airline industry would go the same way as merchant shipping.

I hope those who voted for this shower are having second thoughts!

[brakedwell]

Forget aviation fuel, if the shower in charge want more taxpayers' dosh to squander, they could legalise cannabis, cocaine and heroin, then tax the drugs at the same rate as tobacco because they will ruin your health.

[unwiseowl]

Charter airlines will all relocate to Spain - at last a government policy which pleases me:cool:

[luoto]

Wonder if BAA plc will try and introduce tax-free aero fuel .. each pax buys a few kgs...

[Human Factor]

We more or less have the capacity in the 777 to do JFK-LHR-JFK on one tank of fuel so hopefully won't be too much of a problem.:eek:

[btmtdi]

link to eu plan to tax aviation fuel (http://europa.eu.int/comm/energy_transport/mm_dg/newsletter/nl038-2003-02-14_en.html#02)

[unwiseowl]

"MEPs also called for the introduction of a worldwide aviation fuel tax." Well that's about as likely as the abolishtion of war , famine and disease, isn't it?

[WorkingHard]

This is oft repeated and siezed upon by various pople without a thought for the facts. For those of us actually flying rather than the press or others who may read this we should know better. AVTUR is currently tax and duty free but AVGAS is very heavily hit by duty and VAT. So you guys please spare a thought for those at the piston engine end of the industry. They do still exist in large numbers.

[ORAC]

Sunday Times - February 23:

Air passengers face doubling of ticket tax

AIR passenger duty — the “ticket tax” paid on all flights from Britain — could be doubled under government plans to combat the environmental impact of air travel.

Ministers are expected to announce soon that the tax will double, increasing the charge to £10 a ticket on standard class domestic and European flights and £40 on standard class long-haul flights. The move, which will increase revenues to the Treasury from £800m to about £1.6 billion a year, would mean the total tax for a family of four flying to Florida would be £160. The same group flying in business or first class seats would pay double that amount...........

A consultation document will be issued by the government in weeks outlining “economic measures” aimed at dealing with the environmental impact of the airline industry. Jointly produced by the Treasury and the transport department, it will offer options including:

- Setting strict limits for the amount of aircraft exhaust emissions allowed by each airline. These could be “traded” if one company came in below its limit and another needed extra capacity.

- Lifting the exemption from tax and VAT that currently applies to aviation fuel.

Ministers, however, are understood to favour the doubling of the passenger duty after representations from the airlines that taxing aviation fuel, in particular, would be catastrophic for the industry.

However, the airlines are also against the extra passenger tax, warning that it will hit them at a time when they hope to be recovering from the aftermath of the effects of war on Iraq.

[soddim]

T’aint natural – which bit of this shower did you vote for? You seem to be ready to defend them.

You probably didn’t notice the outrageous scrapping of advance corporation tax in the first budget of that greedy little Scotsman but you might eventually notice the 15% he took off your pension as a result.

Nothing, repeat nothing, is safe from his greedy little fingers at the moment even if it ruins industry and kills his source of revenue. If you think this is ‘specious drivel on a par with the stories of the drunken pilots who wake from their slumbers long enough to push the wrong button before falling asleep again or an excuse for a slow-witted rant’, just see what he does when his tax revenue falls short of his budget.

Sorry I was slow to reply but I am just a slow wit who does not trust this lot.

[brakedwell]

Human Factor - have you worked out how much it would cost to carry all that extra "tax free" fuel across the pond?

[spud]

The cost of carrying a bit of extra tax free fuel pales into insignificance compared to the cost of keeping the Blah/Brown/Campbell government of highwaymen in power.

[Lucifer]

I love that bit where it says something along the lines of - you may not be able to travel from your first choice of airport and may have to travel further to get a better deal.

How exactly does this idiotic govenment propose that we do this? By clogging up roads even more, polluting the countryside even more? Or travelling on train routes on which services may have to be cut because they are too congested?

If someone only made some INVESTMENT instead of looking at theses costs as too great an expense, neglecting to take into account the fact that investments last and you don't need to spend thousands making what shoddy transport network we have last another 1,000 years in its present form, then we all may actually be able to get where we want.