Foreign holidays could soar in price, sources warn 

Travellers face higher taxes on foreign holidays to help pay for a cut in air passenger duty on domestic flights.

Boris Johnson unveiled plans last week to slash the duty on internal flights to help improve connections within the UK.

But Whitehall sources told the Daily Mail the move is likely to be paid for by increasing the charges on flights abroad.

Overall revenue from the tax could even rise as a result of the Prime Minister’s plans, the sources added, hitting the travel sector as it tries to recover from the disruption of the pandemic.

Transport Secretary Grant Shapps hinted at the plan this week when challenged over the impact on the environment of cutting APD on domestic flights. 

‘We will make sure air passenger duty, which was not designed with carbon control in mind, is not collecting any less overall,’ he said.

The Department for Transport yesterday confirmed that a consultation will consider ‘increasing the number of international distance bands’, with higher charges for certain destinations.

At present there are only two bands – less than 2,000 miles, with APD starting at £13, and more than 2,000 miles, which would cost an economy passenger £80.

Introducing more bands could allow the Treasury, which views the tax as a key source of revenue, to charge higher rates on more distant destinations.

In 2019-20 APD raised £3.9 billion, though this slumped to £600 million last year and is not forecast to recover fully until 2024.