Holidaymakers are set to be hit by higher air fares and tourist tax rules – this is what it could mean for you.
Rachel Reeves has announced a business rate increase in her recent Budget.
Heathrow, which already pays the highest rate in the country, is set to see its rate bill go from £117 million to £240million in three years,according to tax advisor company Ryan LLC.
The UK’s biggest hub will see a 353 per cent increase in its rateable value in 2026, in comparison to its valuation in 2023.
London Gatwick Airport will also see its rate bill more than double, and will be hit with an £80million charge by 2028-29.
Meanwhile, Manchester Airports Group will be charged £75million. It owns East Midlands Airport and Stansted.
The chief executive of AirportsUK, Karen Dee, told The Telegraph how holidaymakers will be impacted by the bill increases.
She said: ‘It’s a short-sighted move that passengers will feel in their pockets with both hard-working families and business flyers experiencing price rises and more limited choices.’
The expert hit out at Labour supporting new terminals and runways whilst also ramping up charges that might make such plans difficult for hubs.
She explained how the increase could make some companies ‘review billions of pounds of transformational investments’ as well as put jobs at risk.
‘This will obviously have a knock-on effect for the businesses that depend on airport connectivity in all areas of England, negatively impacting local economies that depend on the supply chains, tourists and connections their airports provide,’ Karen added.
She blames the increases on how successful the travel industry has managed to bounce back from the pandemic.
This, Karen says, has led to the cost being passed to airlines and therefore an increase in fares for passengers.
It comes after the UK has reportedly become one of Europe’s most expensive countries for air travel.
Global industry body International Air Transport Association (IATA) outlined how the nation had become one of the more costly locations across the continent for travel by plane, Business Traveller reports.
Several factors have played into this – including the country’s growth outlook and taxes.
Costs for airlines to operate in the UK, as well as the nation having some of the highest ticket taxes across Europe, have contributed to the issue.
The country is declining in popularity too.
Airlines, including easyJet, Ryanair and British Airways, recently reported a reduction in international tourists visiting the UK, as per Travel And Tour World.
