The trade association, which represents almost 400 UK tourism businesses and attractions, says the tax on flights needs to be reduced by 50% to help UK businesses expand and bring the country more in line with European neighbours.
UKinbound, chief executive officer, Deirdre Wells commented “A reduction in APD would be a clear message to the tourism industry and businesses across the UK that the Government is committed to its vision of a Brexit ready Britain.
"Effectively a tax on trade, we need to signal to Europe and the rest of the world that the UK continues to be open for business. Tourism is the UK’s sixth biggest export earner and it’s imperative that our industry build vital trading partners post-Brexit to ensure the economy doesn’t adversely suffer.
“The Government acted on concerns earlier this year when it confirmed a freeze on APD band B destinations, but this is not enough to safeguard our nation’s competitiveness in a post-Brexit environment.
In its letter to Hammond, UKInbound reiterated findings in research by PwC, which found that thousands of new jobs would be created by significantly reducing or abolishing APD would create tens of thousands of new jobs.
Ironically, top UK accounting firm MHA MacIntyre Hudson has claimed there is virtually no chance of an APD cut in 2018 as the industry faces up to a tough year. The weakness of the pound and a squeeze on incomes all threaten to impact holiday sales, which would reduce the funds raised by the tax.
Rajeev Shaunak, head of travel & tourism at MHA MacIntyre Hudson said: "APD generates approximately £3 billion for the UK treasury and any reduction would impact other politically sensitive areas such as health, education and social services. There’s also a danger that if the tax is cut, airlines, already under pressure from increasing oil prices, will simply raise fares. This will leave passengers, and the industry, no better off.
“The most important factor for the sale of holidays is an increase in the ‘feel good factor’, and putting more money into people’s pockets is the easiest way to do that. Stimulating the economy is vital and an increase in personal tax allowances will encourage spending."
