Ending tax breaks on private jets could raise £2.7bn, new analysis reveals

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Charity calls to bring taxes in line with economy class flights, with many private jet passengers currently paying minimal air passenger duty, no VAT and no fuel duty on polluting aviation fuel

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Closing a tax loophole which means some of the wealthiest travellers pay only a fraction of the rate of tax paid by ordinary airline customers could raise £2.7bn a year for the Treasury and incentivise lower emissions, campaigners have said.

Climate charity Possible, which has proposed the tax reforms, has also carried out polling showing that two thirds (67 per cent) of the public would support the introduction of fairer tax rates for private jets.

On a per passenger basis, travelling by private jet is among the most-polluting means of travelling, yet also among the least taxed. A London to New York private jet passenger emits up to 27 times more climate-altering fossil fuels than a passenger flying economy.

There are around 100,000 UK private jet departures a year, producing toxic pollution similar to the annual emissions of Southampton, analysis from the charity found.

Despite this 22 per cent of private jet passengers pay no air passenger duty (APD) at all and only around 25 per cent pay the highest rate, Possible’s researchers said. No VAT is levied on these journeys, and no fuel duty is paid on private jet kerosene.

Currently APD raises about £4.2 billion per year – or 0.5 per cent of HMRC tax receipts, but small increases are on the way which will increase taxes for private jet passengers to £142 for a short-haul flight or £1,141 for long-haul, sums which Possible described as “a negligible proportion of what can be tens of thousands of pounds per hour spent on chartering private aircraft”.

Instead, they say the government should increase taxes on private jet travel so it approaches similar levels as those travelling in economy class.

They suggest:

• Bringing the APD up to around 15-45 per cent of the ticket price, which is still lower than the 25-55 per cent typically paid by economy class passengers. This would raise up to £1.2 billion a year from private passengers.
• Introduce a fuel duty on kerosene used by private jets, set at £5.295 per litre, or 10 times the normal motor-fuel rate. This would raise up to £1.5 billion a year.

“Taken together, they would bring the taxes paid by private jet passengers up to around 55 to 63% of the ticket price. These are around the tax rates paid in the form of APD by economy class travellers in the lowest-cost seats, ensuring private jet passengers pay the same tax as the rest of us.”

Alethea Warrington, head of aviation at Possible, said: “Private jet passengers are currently paying almost nothing in tax while producing an astronomical amount of pollution, on journeys that only the obscenely wealthy can afford. In the cost-of-living and climate crises, that simply isn’t acceptable.

“Introducing a fair rate of tax on private jets – which ordinary people already pay on standard economy class plane journeys – could raise billions each year for our vital public services.”

She added: “In this month’s Budget, the chancellor faces a clear choice: will she tax the most polluting journeys taken by the wealthiest people, or instead slash essential services relied on by the most vulnerable, such as funding for warm homes?”

The Independent has contacted the government for comment.

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