« Bad time for business, boom time for fraud | Main | Don't peak too soon »

Air passenger duty by numbers

The Court of Appeal's rejection of the Federation of Tour Operators' case against the Treasury was hardly a major surprise.

Lawyers can argue about anything, but they agree on the importance of precedents - and in that light, it was unlikely the Lord Justices would decide the Treasury should repay £50 million in tax to anyone. Think where it might lead.

The FTO argued its members' human rights had been breached by having £50 million taken from them after Chancellor Gordon Brown, as he was, suddenly announced a doubling of air passenger duty in December 2006.

The rise was introduced within seven weeks, forcing tour operators to pick up the bill on holidays booked prior to the announcement. Airlines could simply surcharge passengers for the money, but tour operators were largely prohibited from doing so by the Package Travel Regulations.

The FTO's appeal rested on five points following the dismissal of an earlier challenge in the High Court last year.

First, the Treasury was ignorant of the impact on tour operators when it decided to double APD at short notice. Second, there could be no environmental justification for increasing tax on bookings already made.

Third, the government had previously delayed increases in APD out of recognition of the restraints on tour operators. Fourth, it would have been easy to exempt existing bookings and, fifth, the increase was retrospective.

The Treasury countered with five arguments of its own. First, that it took the impact on tour operators into account after this was pointed out and ministers decided to proceed anyway.

Second, the 'environmental benefit', whatever that might be, was not the only reason for the tax increase. It also aimed to raise revenue - and excluding pre-booked flights would have cost the Treasury £50 million.

Third, the previous postponements were not comparable. Fourth, the nature of a tour operator's business meant an increase in APD was always a risk. And fifth, governments have a right to determine tax measures.

In keeping with this legal-case-by-numbers approach, the FTO's case was dismissed on four counts.

First, the Lord Justices decided: "A postponement [of the tax rise] for tour operators alone would have been difficult to justify."

Second, postponement across the board would have involved 'substantial loss of revenue'.

Third, tour operators were not uniquely disadvantaged. "Airlines took a commercial risk in passing on the increase to passengers, and one [British Airways] chose not to."

Fourth, tour operators "were not unable to absorb the impact" - note the lawyerly double negative. They could mitigate the effect by increasing charges for passengers who booked subsequently, and at least one did.

So basically, this sudden rise in tax was justifiable because that is what it was. But I'm no lawyer.

TrackBack

TrackBack URL for this entry:
http://blogs.travelweekly.co.uk/movabletype/cgi-bin/mt-tb.cgi/5411

Comments (9)

Keep functioning ,fantastic job!

Wow! Thank you! I continually wanted to write on my blog something like that. Can I include a part of your post to my blog?

Great website! I am loving it!! Will come back again. I am bookmarking your feeds also

Super-Duper site! I am loving it!! Will come back again. I am bookmarking your feeds also

I keep listening to the news broadcast speak about getting free online grant applications so I have been looking around for the finest site to get one. Could you tell me please, where could i get some?

I would like to thank you for the efforts you have put in writing this blog. I am hoping the same high-grade web site post from you in the upcoming also. In fact your creative writing abilities has inspired me to get my own web site now. Really the blogging is spreading its wings rapidly. Your write up is a good example of it.

Apple now has Rhapsody as an app, which is a great start, but it is currently hampered by the inability to store locally on your iPod, and has a dismal 64kbps bit rate. If this changes, then it will somewhat negate this advantage for the Zune, but the 10 songs per month will still be a big plus in Zune Pass' favor.

Thanks for sharing Air passenger duty by numbers (Taylor on Travel) with us keep update bro love your article about Air passenger duty by numbers (Taylor on Travel) .

This is a great web page, will you be involved in doing an interview about how you developed it? If so e-mail me!

Post a comment

About

This page contains a single entry from the blog posted on July 4, 2008 4:44 PM.

The previous post in this blog was Bad time for business, boom time for fraud.

The next post in this blog is Don't peak too soon.

Many more can be found on the main index page or by looking through the archives.

Powered by
Movable Type Pro