Holiday makers will pay more tax next year

The Government confirmed last week that Air Passenger Duty (APD) will increase by 8-10% from April 2012. They have also confirmed that passengers who have already booked and paid for their flights will not escape the increased cost.

The twice the rate of inflation increase will be applied to all departures from the UK from 1st April, regardless of the date the flight was booked.Hundreds of thousands of passengers who have already booked travel to depart after April 1st could be contacted by their airline for an additional payment to cover the increased tax.

Some airlines and tour operators, including Thompson and First Choice are currently considering whether they are able to absorb the cost or will have to pass it on to customers. TUI Travel which owns both Thompson and First Choice have said that they will not announce until the New Year whether they will pass on the cost to customers.

You may be surprised at how much of the cost of your flight or package holiday is actually tax. It's not too bad for economy, short-haul flights (Europe, Tunisia and Morocco), which will rise from £12 to £13. But if you travel long haul or upgrade to premium economy or business class the cost rises significantly.

Tax on economy departures to the US, Egypt, Dubai and other destinations in band B will increase from £60 to £65.

Tax on economy flights to the Caribbean, Mexico, East Asia, Thailand and other countries in band C will go up from £75 to £81.

And tax on departures to Singapore, Australia, New Zealand, Argentina, Chile and other destinations in band D will rise from £85 to £92.

APD is charged per person, which means the cost soon adds up if are paying for a family holiday, with a family of four planning to enjoy a holiday in Florida next summer paying £260 in Airport Departure Tax.

You might also think twice about upgrading to premium economy or business class as APD on these fares is likely to be double the rates listed above.

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