International Taxes

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United Kingdom Air Passenger Duty

March 27, 2014

The Air Passenger Duty (APD) in the United Kingdom is an excise duty which is due on chargeable passengers being transported from a UK airport on a qualifying aircraft. The amount of APD due is based on the number of chargeable passengers, their destination and the "class" they are travelling in.

While the APD impacts both commercial airlines and business aircraft, key points for NBAA Members are:

  • Aircraft below 5,700 kg (12,566 lbs) are excluded from the APD.
  • APD charges for business aircraft are per passenger and based on the distance of the flight.
  • Business aircraft between 5,700 kg and 20,000 kg (12,566 and 44,092 lbs) are subject to the same rates as commercial airlines instead of being subject to a special higher rate. For these aircraft, potential APD charges range from £13 to £94 per passenger.
  • Aircraft above 20,000 kg (44,092 lbs) with less than 19 seats will pay a higher APD rate. The potential APD range is from £52 to £376 per passenger.
  • APD only applies to passengers. Crew members carrying out required duties are not chargeable passengers. Deadheading crew members are also excluded from APD as long as they carry out required duties within 72 hours of that flight.
  • APD applies to aircraft above 5,700 kg regardless of their EU importation status or country of registration (it also applies to UK registered aircraft).
  • APD only applies to aircraft taking off from a UK airport.

As part of the 2014 Budget process, the UK did make certain modifications to the APD which will become effective on April 1, 2015. To make the tax less onerous for long-haul flights, distance bands C and D will be eliminated. However, the budget will raise the highest APD rate for aircraft over 20,000 kg (44,092 lbs) with less than 19 seats from four times the reduced rate to six times the reduced rate. The rate tables below provide details on the change.

Registration Requirements

Operators that have qualifying flights must register with the UK HMRC and begin charging for APD by April 1, 2013. However, the UK has developed a simplified reporting/payment system for "Occasional Operators" that have no more than 12 flights from the UK per year with an annual APD liability of no more than £5,000. This system allows operators to forego the normal registration requirements assuming they meet the above requirements and APD payments are made within 7 days of any flight occurring.

If eligible for the Occasional Operators Scheme, a combined registration and payment form APD6 may be completed and submitted along with required payment within 7 days. This form fulfills the registration requirement and no other action is necessary.

Another option is the "Annual Accounting Scheme" which allows operators with less than £500,000 in annual APD liability to make payments on an annual basis. Normally, APD is reported on a monthly basis so this system is designed to simplify the reporting process. This option could be desirable for operators with more than 12 flights from the UK per year or those that desire to pay APD on an annual basis, rather than within 7 days of each flight from the UK.

Operators must apply to participate in the annual accounting scheme using the instructions in Notice 552. Registration for APD using form APD1 is also required to participate in the annual accounting scheme.

APD Rate Table from April 1, 2013

Bands
(Distance from UK)
Reduced Rate:
(5,700-20,000 kg
)
Higher Rate:
(Above 20,001 kg)
Band A (0-2000 miles) £13

£52

Band B (2001-4000 miles) £67 £268
Band C (4001-6000 miles) £83 £332
Band D (over 6000 miles) £94 £376

Note: Destinations are categorised into four geographical bands based on distance from London to the capital city of the destination country/territory (with the exception of the Russian Federation which is split east and west of the Urals). Review destnations by band.

APD Rate Table from April 1, 2014 (Inflation Adjustments Only)

Bands
(Distance from UK)
Reduced Rate:
(5,700-20,000 kg
)
Higher Rate:
(Above 20,001 kg)
Band A (0-2000 miles) £13

£52

Band B (2001-4000 miles) £69 £276
Band C (4001-6000 miles) £85 £340
Band D (over 6000 miles) £97 £388

APD Rate Table from April 1, 2015 (UK Budget Adjustments)

Bands
(Distance from UK)
Reduced Rate:
(5,700-20,000 kg
)
Higher Rate:
(Above 20,001 kg)
Band A (0-2000 miles) £13

£78

Band B (2001-4000 miles) £71 £426

Sample APD Calculation

Aircraft is a Falcon 50 (38,000 lbs MTOW/17,236 kg) that travels from the UK to Moscow with 3 passengers.

  • Aircraft is below 20,000 kg
  • Distance falls into Band A
  • APD rate is reduced rate due to aircraft weight
  • APD is £13 per passenger- £39 for the flight

Resources

For More Information

NBAA Members with questions about this proposal, or other international tax issues, should contact NBAA’s Operations Service Group at [email protected].