British holidaymakers heading abroad face a collective tax bill of £2.4 billion in 2015, according to a report by the Tax Payers’ Alliance (TPA).
Paper The Tax on Holidays puts the average tax paid by everyone travelling abroad at £62. The collective figure of £2.4 billion is up £900 million from 2008 – an increase the TPA puts down mainly to higher Air Passenger Duty and VAT.
The tax paid by holidaymakers who travel abroad ranges from premiums on Air Passenger Duty and holiday insurance to much lower-value items such as sun tan lotion and hair care products.
According to the research a family of four travelling to Florida can expect to incur £384 in taxes even before setting foot on the plane. This is £198 higher than the equivalent trip in 2008. A family of six travelling to Spain may pay £195 in taxes just for going on holiday.
PwC produced a report earlier this year suggesting scrapping Air Passenger Duty (APD) could create 61,000 jobs in UK airports as air traffic increases.
The report also calls APD primarily a revenue-raising measure – as opposed to an environmental one. It claims the revenue lost would be made up for by the high volume of new jobs created.
Governments looking for increased devolution in Wales, NI and Scotland are already calling for controls on APD to raise revenue in their respective regions. In Scotland the government is looking to reduce the tax by up to 50%.
Tax Payers’ Alliance chief executive Jonathan Isaby said he believes “it’s wrong that a week in the sun comes with such a huge tax bill”.
“The taxman chases holidaymakers all the way to the departure gate,” he continued.
“These taxes are not only too high but hit those on lower incomes the hardest, making it more difficult for hard-working people to get away for a well-deserved break during the summer holidays.
“The benefits of lower Air Passenger Duty have been noted by politicians in Stormont, Holyrood and Cardiff. It is time for politicians in Westminster to reach the same conclusion.”
Further reading: The evolution of predictive analytics