Chancellor Jeremy Hunt revealed plans for an increase in APD on business class fares in his spring Budget – known as standard rate APD – but did not reveal exact details.
The announcement was met with howls of protest from groups including Airlines UK, which said the increase would “only make the UK even less competitive on the global stage” despite premium fares generally agreed to have fallen since the pandemic.
The Treasury has now confirmed changes, which will apply to travel where the seat pitch is more than 40 inches. Most premium economy cabins offer 38 inches, meaning they attract lower rate APD.
The current standard international APD rates are Bands A,B and C at £26, £191 and £200. Band A is for up to 2,000 miles, Band B for 2001 – 5,500 miles and Band C for flights in excess of 5,500 miles.
From April, Band A will remain the same, while B and C increase to £194 and £202.
A slightly bigger increase is proposed in 2025/26, when the respective rates will be £28, £216 and £224.
APD on domestic business class flights will increase by £1 to £14 during the period.
The majority of passengers pay the base rate APD. This currently ranges from £6.50 for a domestic flight to £91 for Band C. These will also increase slightly, with 2025/26 rates ranging from £7 to £94.
The Treasury confirmed there would be no change to the devolved APD in Northern Ireland, which is set at zero for direct long-haul journeys outside Band A.
