11/03/10, 10:26:29 EST

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Tour operators to challenge airline tax

scotsman.com

LONDON - The Federation of Tour Operators (FTO) said on Monday that it would challenge the legality of the Air Passenger Duty airline tax.

FTO said that if the high court bid is successful the government would be forced to scrap the Air Passenger Duty (APD) brought in 1994 and repay holiday makers and airlines more than 2 billion pounds the tax has raked in since 2004. Chancellor Brown announced a doubling of air passenger duty in December's Pre-Budget Report, taking the levy on short-haul flights to 10 pounds and on long-haul to 40 pounds from February 1 The FTO claims that under international laws included in European legislation in 2004, the government is not entitled to impose dues or charges on aircraft solely for the right of transit over, or flying in or out of Britain from another country. "Charges are only permitted if they are cost-based in relation to the provision of a service, such as use of airports or air navigation services," the FTO said in a statement. "APD is not levied for any such service and is simply a tax which raises revenue for general government spending." "As a result APD is in contravention of Article 15 of the Chicago Convention, has been illegal under EC law at least since 2004 and should be withdrawn with immediate effect," it added. Unlike airlines, tour operators, in most cases, cannot pass the rise on to holiday makers who booked their trip before February. The FTO claims the new tax rules breach the human rights of operators by not allowing them pass on the higher charges to holiday makers who booked early. Treasury minister John Healey has already had to defend the legality of the hike after being quizzed in parliament. Budget airlines have also attacked the rise in duty as a ploy to cash in on the rapidly growing market for no-frills flights.

 Printable Version  | published Feb 26, 2007