In Brief: The UK’s travel industry is set to encounter elevated costs as the Air Passenger Duty is slated to rise, along with other business expenses, starting from April.
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UK Travel Sector Faces Higher Air Passenger Duty and Business Costs in April – Image Credit Unsplash
ABTA has outlined several regulatory and tax changes taking effect in April that will impact UK travel businesses, including increases in Air Passenger Duty, the end of business rates relief, and higher employment costs.
ABTA has identified a series of regulatory and tax developments in April affecting UK travel businesses and their customers. Air Passenger Duty (APD) for short-haul economy flights will increase to £16 from April 1, following a 13% rise in all APD rates announced in the 2024 Budget. The increase is intended to address real-term cuts in previous years.
The removal of business rates relief, introduced during the Covid period to support sector recovery, will also take effect in April. Combined with property revaluations, this change may result in higher rate bills for many high street travel agents. While increases in rates across the travel sector are generally lower than in other sectors, such as hospitality, some businesses may still experience significant increases.
Employment costs are set to rise in April. The National Minimum Wage will increase to £12.75 on April 6, with the rate for workers under 21 rising to £10.85. The Employment Rights Act 2025 will introduce new employment law changes from April 6, granting employees day-one rights to statutory sick pay and key family-related leave, including paternity leave. Further reforms are anticipated as government consultations continue.
ABTA has advised its members to review their policies to ensure compliance with the new regulations and to seek professional advice as needed.
Research from ABTA shows that outbound travel generates £52 billion for the UK economy each year and supports more than 818,000 jobs across all regions. The government has referenced the travel sector in its plans for future growth, including support for airport expansion at Luton, Gatwick, and Heathrow.
ABTA continues to engage with government and policymakers on issues related to competitiveness and the cumulative effects of changes in taxation, policy, and regulation. The association’s public affairs activities include collaboration with partners such as the Future Travel Coalition and the All-Party Parliamentary Group on the Future of Aviation and Travel.
ABTA research projects that the industry could contribute £62 billion in gross value added annually by 2030 and add over 100,000 jobs. The association is calling on the government to recognize the barriers facing the industry and to work in partnership with the sector to ensure a supportive environment for travel businesses.
