Abolition of flight taxes could mean more business

Amongst the raft of tax changes that came into effect earlier this month, it was announced that there will be cheaper flights for thousands of people who travel over 4,000 miles by air, although those who fly between 2,000 and 4,000 miles will pay more in duty.

The two more expensive bands of the Air Passenger Duty (APD) were abolished on 1 April. Band ‘C’ affects people travelling over 4,000 miles, and band ‘D’ affects journeys over 6,000 miles.
Band C passengers flying economy class paid £85 each in APD in 2014, and will now pay £71, a £14 reduction. Band D passengers paid £97 last year, and will now pay £26 less.

According to the Treasury, the measures will boost trade with emerging economic countries, such as Brazil and China, as it will be cheaper for businesspeople there to fly here and do deals with UK firms.

Recent research found that the average number of countries British businesses typically trade with is rising, with an increase from 2.1 countries to 2.3 in the last half of 2014. Meanwhile, 47 per cent of the small firms polled said that have increased the number of countries they do business with.

In fact, a quarter of all small and medium-sized enterprises (SME) business revenue comes from international trade, far exceeding that of other Western economies, while 43 per cent of UK businesses expect exports to account for an even greater proportion of revenue this year.

A spokesman for the Department of Business, Innovation & Skills (BIS), said that the new tax bands will help to secure more business for British firms from emerging countries and the trend that has already begun will increase as the year goes on.

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