UK looks at fuel tax & VAT
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UK looks at fuel tax & VAT
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...............
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...............
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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!
) 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.
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!
) 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.
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 ?
So why compare air transport with private vehicles ?
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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
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
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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 !!!
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 !!!
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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.
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.
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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.
It is however typical of any government to find something that plenty of people rely on and then tax it.
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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.
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.
Jet Blast Rat
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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?
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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.
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.
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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
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
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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!
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!
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.
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