A discussion paper published jointly by Her Majesty’s Treasury and the Department for Transport in March 2003, entitled “Aviation and the Environment: Using Economic Instruments”, considered the role of economic instruments and the environmental costs of aviation. This was also considered in the Air Transport White Paper, “The Future of Air Transport”, published on 16 December 2003 and in chapter 5 of “Aviation and Global Warming”, published by the Department for Transport on 10 February 2004.
The Air Transport White Paper set out the conclusions of the Government's analysis, including our view that aviation should be brought within the EU emissions trading scheme by 2008, as the most effective way of tackling the climate change impact. Along with other measures to tackle local environmental impacts, this will help to ensure that the air transport sector meets its environmental costs.
In the Financial Statement and Budget Report 2006 the Government stated that:
"the Government is aware that economic instruments, including APD, may provide a route through which improved environmental performance in the aviation sector can be incentivised and so will continue to explore options for developing further such measures."
Not all transit flights are exempt from air passenger duty and in order to qualify specific criteria must be met. These are set out in Her Majesty’s Revenue and Customs' public notice 550, which gives details of the specific requirements of the exemption criteria. This notice can be obtained from the Revenue and Customs website at www.hmrc.gov.uk
Exempting connecting flights ensures that passengers are not taxed twice for a journey when making a connecting flight within the UK, or that if they are entering the UK in transit to an end destination outside the UK they are not taxed merely for the short stopover in the UK that is necessary to catch a connecting flight.
HMRC does not collect data on the number of transit passengers that pass through UK airports, and therefore we have not made any analysis on the extra revenue that charging APD on these passengers would raise.