Tax and national insurance

Aito said any increase in National Insurance and corporation tax levels would impact on an industry with already tight margins. It warned these would affect the ability to rebuild balance sheets post-pandemic, which was vital to meet the needs of industry regulators when financial health was assessed.

Aito executive director Martyn Sumners said: "The government has said it wants to stimulate growth and help small business. There is, however, concern among Aito members that potential measures in this week’s Budget will, in fact, adversely impact SMEs."

Taxes on flying

Abta has told the Treasury the UK charged “among” the highest rates of aviation taxes in the world and said it would be a mistake to penalise “hard-earned and highly valued holidays”.

This was echoed by the Advantage Travel Partnership. “We hope the government avoids increasing taxes such as Air Passenger Duty which will continue to place the UK at an uncompetitive disadvantage in comparison to other nations,” said chief executive Julia Lo Bue-Said, who also founded the UK Outbound Travel lobby group founder.

Aito's Sumners said APD “was originally introduced as an environmental tax, but has morphed into a general tax penalising all travellers and particularly families”.

"This will further burden SMEs which, unlike the airlines, who can pass on the increase in tax, will have to absorb the cost as a requirement of the Package Travel Regulations. How can this be fair?”

Sumners said the government should consider allocating £1 per passenger from APD to “eventually remove the need for Atols and for bonding”, adding: “Such a step would benefit hugely everyone involved – from consumers to SMEs, across the entire travel industry.”

Karen Dee, chief executive of AirportsUK, added: “Resisting increases in taxes on airports, like business rates and APD, will allow ministers to show clearly that the UK is welcoming, global, outward-facing and competitive.”

Sustainable flying

Abta warned of a “layering” of taxes on flying with the incoming sustainable aviation fuels mandate and emissions trading costs. “This layering could increase the cost of flying to the extent that demand in this vibrant part of our economy is unduly suppressed,” it said.

Tim Alderslade, Airlines UK chief executive, said the key strategic priority for the sector was working towards net zero emissions.

"Through the spending review, we are looking for continued investment in the early mover UK SAF plants to keep them on track to reach a final investment decision as soon as the SAF revenue certainty mechanism becomes law.”

He added he wanted an indication of investment in carbon capture projects and for the Aerospace Technology Initiative, through which the UK is investing to develop the next generation of zero emission aircraft.

Business rates and Covid loans

Abta is urging the government to maintain the 75% business rates relief for retail travel agencies, which is due to end in April 2025.

"We continue to call on the government to maintain this relief, while at the same time, urging them to deliver on their manifesto commitment to reform business rates,” Abta said.

"Abta believes a redesigned rates system will encourage and support those businesses based on the high street, many of which are currently at a disadvantage when it comes to business rates, while also avoiding any duplication of taxation for businesses that operate both online and offline.”

Aito called for a relaxation of conditions relating to refinancing Coronavirus Business Interruption Loans (Cbils) and other Covid loans, alongside “entrepreneurs’ relief” being maintained when owners seek to exit their business.