Air passenger tax has been increased in the Budget, meaning holidaymakers will have to pay more to fly.
In her statement, Chancellor of the Exchequer Rachel Reeves announced an increase in the cost of passenger flights, with the tax increasing by £2 per flight for short-haul flights in economy class.
Under Labour’s new rules, passengers on these flights will pay £17 in tax for short-haul flights abroad from 2026, a total increase of £4 including the increases adopted by the Conservatives.
Smaller impact: short-haul flights will cost £2 extra under the new rules from April 2026
Currently, economy passengers pay £13 for flights to Europe and North Africa, or £7 for domestic flights.
The increase will not come into effect until the 2026/27 tax year.
Previous Tory plans saw the tax rise by £2 in April next year, with premium passengers paying as much as £224 for long-haul flights.
The government said the increase was intended to ensure that revenue from the tax ‘remains sustainable’.
Mark Tanzer, Chief Executive of ABTA – The Travel Association, said: ‘While a £2 increase may not seem like much, it brings the UK’s air passenger tax on economy flights to £15 per person, per flight. British travellers already pay more in air passenger tax than most other countries, and it is one of a number of taxes and charges that people often have to pay when they travel.
‘The UK already charges the highest APD rate in Europe. The Office for Budgetary Responsibility notes that APD is one of the fastest growing taxes in the UK. The government must keep a close eye on the overall cost of travel to ensure hard-earned holidays remain within reach.’
Ahead of the Budget, a high-profile increase was dubbed a ‘holiday tax’ and there was a flood of flight bookings as Britons sought to avoid the incoming tax.
The real increase, however, will come for those flying on private jets.
Reeves said the tax for passengers on private flights will be increased by 50 per cent.
This, Reeves said, equates to £450 per passenger on a private jet to California, mocking former Prime Minister Rishi Sunak, who is expected to be offered a job in the US.
The government also announced it would consult on extending the higher rate to more private jets.
For aircraft equipped to carry fewer than 19 passengers, passengers flying long distances can currently expect to pay £607.
No change was announced for business class flights, with passengers currently charged £14 for domestic flights and up to £202 for international flights.
These amounts came into effect in April, having risen from £13 and £202 respectively.
The tax hike is part of the government’s attempt to plug what it calls a £22bn “black hole” in Britain’s finances. Prime Minister Keir Starmer previously warned the budget would be “painful”.