Families will be hit with the highest ever tax rates on flights in Labour’s multi-billion-pound raid on holidaymakers.
Analysis shows air fare levies for a family of four to popular destinations such as Walt Disney World in Florida will surge above £400 for the first time after the hike.
The finding comes ahead of Sunshine Saturday next weekend, when millions will buy foreign breaks on what is traditionally the busiest day of the year for bookings.
Critics said it makes a mockery of the Government’s claim that it has not raised taxes on ‘working people’ and that it is prioritising economic growth, given the move is set to hammer the travel industry. Bosses in the sector are already considering shedding jobs and investment due to Rachel Reeves’s National Insurance raid on businesses.
In the October Budget, the Chancellor hiked Air Passenger Duty (APD) – a stealth levy on fares also known as the ‘holiday tax’ – by 15 per cent on most flights, which is more than five times the current 2.6 per cent rate of inflation.
A study by the TaxPayers’ Alliance shows by April 2026, when Ms Reeves’s APD hikes take effect, inflation will have risen by about 111 per cent since 1994 when the levy was first introduced. But over the same period, APD for short-haul European destinations such as Spain will have surged 200 per cent.
For long-haul trips it will have rocketed 920 per cent, and 960 per cent for ultra long-haul. The measures mean the Chancellor will rake in an extra £2.5billion from APD between 2026 and 2030.
It blows a hole in Ms Reeves’s claim that APD has not risen with inflation, which she cited as one of the reasons for hiking it during her Budget speech. Darwin Friend, of TaxPayers’ Alliance, said: ‘While the Prime Minister is able to swan off around the world without the need to pay APD from his own pocket, the taxpayers funding his travel have to work even harder to be able to afford an annual holiday.
The Chancellor hiked Air Passenger Duty (APD) by 15 per cent on most flights, which is more than five times the current 2.6 per cent rate of inflation.
Under Rachel Reeves’s hikes, a family of four in economy class will be taxed £408 to fly to Disneyland Florida
‘Ministers should immediately freeze this tax for an extended period to bring it more in line with inflation.’ Tory transport spokesman Gareth Bacon said: ‘Farmers, pensioners, small businesses and now holiday-goers. Keir Starmer wants them all to pay to fund his inflation-busting pay rises for his union paymasters.’
Former British Airways boss Willie Walsh, now chief of industry body the International Air Transport Association, said: ‘British passengers are rightly fed up with paying ever-higher rates of APD.
‘But APD is not just a tax on holidays – it drags down all of the UK.
‘Sir Keir Starmer has said growth is the “number one priority” for his Government.
‘If that is the case, why is he letting his Chancellor throttle aviation – which supports 1.6million jobs, generates £127billion pounds in GDP and which is the only way for the UK to rapidly move its goods and services abroad?’ And Tim Alderslade, boss of Airlines UK, which represents major carriers including BA, Virgin, easyJet and Tui, said: ‘APD already makes the UK less competitive and the increases will hit working people in the pocket and make it harder for airlines to put on and sustain new routes.’
The study shows that, under Ms Reeves’s hikes, a family of four in economy class will be taxed £408 (or £102 per person) to fly to Disneyland Florida – a 16 per cent hike on the current rate.
The amount for ultra long-haul destinations such as Australia will be £424 (or £106 per person), while for short-haul hotspots a family of four will be charged £60 (or £15 per person) – a 15 per cent rise.
When it was introduced in 1994, APD was £5 for destinations in the European Economic Area and other closely connected destinations, and £10 everywhere else.
The cost for a family of four to popular destinations such as Walt Disney World in Florida will surge above £400 for the first time after the hike
If it had risen in line with inflation, it would be £10.31 and £20.62 respectively as of October this year, much lower than the current categories of APD.
The levy is charged on flights taking off from the UK, so is not charged on inbound journeys, and the cost is usually always passed on to customers by carriers.
The APD regime was overhauled in April last year, replacing the former two-band system with a three-tier scheme based on the distance being flown and amount of carbon emitted.
Those flying abroad up to 2,000 miles currently pay £13 in economy.
For journeys up to 5,500 miles the charge is £88 and for ultra long-haul it is £92. The rates for business class seats are even higher.
The Treasury was contacted for comment.
