UK Aviation Industry Responds to New Air Passenger Duty Increases Starting 2027

Published on November 29, 2025

The UK aviation industry has voiced strong concerns over the government’s decision to impose higher rates of Air Passenger Duty (APD) on aircraft weighing 5.7 metric tonnes (12,540 pounds) or more, effective from April 2027. This change, announced in the latest annual budget statement, marks a shift from the initial proposals made during a consultation process earlier in the year.

A Change in Policy

The original proposal, presented during the consultation period that concluded in January 2025, suggested that the higher APD rates would only apply to aircraft weighing 20 metric tonnes or more with fewer than 19 passenger seats. However, the government’s recent announcement broadens the scope of the tax, extending the higher rates to smaller aircraft, including private jets like Embraer’s Phenom 300. This shift has sparked a strong response from industry groups, who argue that the policy change will have significant implications for the UK’s business aviation sector.

Industry Reaction

Several aviation industry groups have issued joint statements criticizing the widened scope of the APD increase. The Air Charter Association, the British Business & General Aviation Association and the Regional & Business Airports Group collectively expressed their disappointment with the decision, which they believe will harm business aviation in the UK. They contend that the new regulations will reduce investment into the country’s aviation sector and could hinder efforts to improve the environmental sustainability of aviation operations.

The higher APD charges, which are set to take effect in 2027, will range from £146.63 ($190) for domestic charter flights to as much as £1,178.20 for international flights exceeding 5,500 miles. The increased tax rates are expected to impact smaller private aircraft, adding financial burdens to operators who rely on these planes for business and leisure purposes.

Projected Impact on Business Aviation

The aviation groups argue that the new APD structure will not achieve the government’s intended financial goals. Despite the projected tax revenue of more than £10 million annually once the new rates are implemented, the industry believes the increased duties will likely have a detrimental effect on business aviation and its contributions to the UK economy. The groups suggest that the tax hikes could drive business investment away from the UK, as companies and private aviation users look for more tax-friendly environments elsewhere.

The UK Treasury’s estimation of the additional £10 million per year in revenue seems optimistic, considering the challenges it will create for smaller operators and private jet users. These groups emphasize that the aviation sector plays a crucial role in facilitating global business operations and higher taxes could deter investment in aviation services, particularly within the business aviation market.

A Consultation on the Way

The UK government has pledged to hold a further technical consultation on the new APD rules, allowing stakeholders to offer feedback on how the revised regulations will be applied. This consultation aims to ensure that the policy is implemented effectively and that any unintended consequences are addressed. However, the aviation groups remain skeptical, noting that the government’s original position seemed more favorable to the industry, only to be revised in the final announcement.

This consultation period will provide an opportunity for operators, stakeholders and industry experts to voice their concerns and potentially influence the final implementation of the new APD rates. Nevertheless, the policy change has already caused significant unease among the aviation community, with many fearing that it will add additional financial strain to an already challenging operating environment.

Historical Context and Future Developments

The higher rates of APD for private charter flights were first introduced by the previous Conservative administration in 2013. The move was part of broader efforts to increase tax revenues from the aviation sector and reduce the environmental impact of air travel. However, the new tax hikes, set to begin in 2027, come at a time when the aviation industry is already grappling with the economic effects of the COVID-19 pandemic, as well as rising fuel costs and increased environmental scrutiny.

In October 2024, the Labour government proposed increases of up to 50% in APD, which are scheduled to take effect in April 2026. These increases are part of a broader effort to raise taxes across various sectors of the economy, with aviation being a particular focus due to its carbon footprint. The government has stated that the funds raised from these increases will be reinvested into sustainability initiatives, including efforts to reduce aviation’s environmental impact.

Conclusion

The UK aviation industry’s response to the new APD increases highlights the concerns of business aviation operators and industry stakeholders who believe that the policy changes could undermine the growth of the sector. With the new tax rates set to impact aircraft as small as 5.7 metric tonnes, the industry’s ability to recover from previous challenges remains uncertain. The government’s upcoming consultation will be crucial in determining whether the APD changes will be implemented as planned or adjusted to address the concerns raised by the aviation community.

As the industry moves forward, the balance between raising tax revenue and supporting the growth of the UK’s aviation sector will be critical. The final outcome of this policy debate will likely shape the future of business aviation in the UK for years to come.