Travel experts are warning people in the UK to book their holidays ahead of the Autumn Budget where tax increases could raise the prices of millions of breaks. Holiday specialists at On the Beach are warning holidaymakers that the Chancellor of the Exchequer, Rachel Reeves, could target Air Passenger Duty (APD) in her upcoming budget.
Labour has promised not to increase income tax, National Insurance (NI) or VAT. However, it has refused to rule out raising a slew of smaller taxes, including APD. Now package holiday analysts are warning that a hike in APD in October will result in direct increase in flights and ultimately the cost of foreign holidays.
Zoe Harris, chief customer officer at On the Beach said: “If you’re thinking about booking your 2025 holiday or any future holiday, our advice is to lock it in now. If ADP is increased, the price of flights will go up, holidays will be more expensive, that’s a fact. If you can take advantage of schemes like we have where you can secure the price of your holiday for a small deposit, then do it, it could end up saving you a fair amount, especially if you’re going long haul.”
Air passengers have already been stung with increases in the duty this year. The lowest rate of APD, on economy class domestic flights, rose by 50p in April, up to £7 from £6.50. Taxes on short-haul flights overseas rose by £2 per seat, while duties on long-haul flights of up to 5,500 miles increased from £194 to £216, an 11% rise.
Zoe Harris continued: “The UK’s Air Passenger Duty is the highest passenger tax levied anywhere in the world. A further increase would be a kick in the teeth to millions of Brits. We’re in a cost-of-living crisis and the government want to punish normal Brits for going away on holiday for a week.
“I’m hoping that the Chancellor sees sense and ensures any proposed increases are scrapped.” The increase is likely to impact long-haul holidays more than short-haul due to the different rates depending on the distance and class of the flight.