The cost of a family holiday is set to drop. HMRC has extended the tax exemption on plane tickets for children under the age of 16.
This decision follows the ruling made in May 2015, which saw Air Passenger Duty (APD) no longer applicable to children under the age of 12. The aim of the new amendment is to “help families by lowering the cost of air travel for children travelling in the lowest class of travel.”
APD is applied to all economy flights leaving the UK. The levy was announced in the 1993 Budget and introduced in 1994. Initially, it cost just £5 for short haul flights and £10 for longer journeys.
This tax break only applies to economy class flights leaving Britain, with long-haul holidays seeing the biggest benefits. This tax break equates to £13 for short-haul flights and £42 for long-haul flights.
Business and first class flights will not be impacted by the change.
Some travel firms, including Monarch and Thomas Cook say they will refund the amount automatically to the credit or debit card that was used.
They appear to be in the minority, however. Many airlines require parents to apply for an APD refund instead of passing the saving on to their customers. Others are insisting that passengers fill out online forms to claim their money or contact their customer services centre. As a result, travellers who aren’t aware of the tax break don’t know to apply and miss out on this tax break.
Added to this, a recent survey showed that a third of respondents said that the hassle of applying for the £13 refund wasn’t worth the admin required.
Want to make sure that you don’t pay more tax than you need to without any extra hassle? Our team of experienced accountants is on hand to help. Send us an email or give us a call on 080 8141 1643 to find out more.