Beginning April 1, 2013 the UK Air Passenger Duty will begin to be applied to non-exempt passengers on all chargeable aircraft that depart from most UK airports.

A chargeable aircraft is defined as a fixed wing aircraft with a Max Takeoff Weight greater than 8,200 kgs (12,566 lbs) that uses Jet A1 fuel. The fees will be applied to all travelers who are not on the list of exemptions (see below for a list of exempt travelers). Most passengers will not fall under the list of exempt travelers and APD fees must be accounted for and paid directly by the aircraft operator or their fiscal representative in the UK. These fees apply to all non-exempt passengers on private Part 91 and commercial Part 135 flights. Currently third party service providers and handlers have been advised that they will not be able to pay these fees on the operator's behalf, but some are exploring ways to offer this service.

Operators with chargeable aircraft that don't meet the criteria of an "Occasional Operator" must register with the UK HMRC and begin paying APD fees as of April 1, 2013. An "Occasional Operator" is classified as making 12 or fewer flights to the UK per year and having an annual APD liability of less than 5000 GBP. See information below under the heading "Occasional Operators" for more information. The latest an operator can register is within 7 days of a chargeable flight taking place. Payment is made on a monthly basis. Each month the operator or their fiscal representative will receive an APD return form which will cover a period of one calendar month. The form will need to be completed and sent to the address provided. The return must be received by the HM Revenue & Customs office no later than the date provided on the form which will likely be the 22nd day of the following month unless that date falls on a weekend or bank holiday. In those instances the return must be received on the last working day prior to the 22nd day of the following month. Operators who do not register and pay on time will be subject to penalties.

  • In order to register an operator must download the APD1 form from the HMRC website (www.hmrc.gov.uk).
  • Once the APD1 form is completed the operator must send it to the following address:
    HM Revenue & Customs
    The Controller
    Central Collection Unit (APD)
    Alexander House
    21 Victoria Avenue
    Southend-on-Sea
    SS99 1AA
    Phone: +44-1702-366558 or +44-1702-366364
    Fax: +44-1702-366562
  • Within 28 days the operator will receive a certificate of registration which will contain a unique reference number, the operator's name, the address of the operator's principal place of business in the UK (or their address abroad if they do not have a principal place of business in the UK), details of the operator's registration, details of the operator's fiscal representative based in the UK if they have appointed one, and the operator's accounting period.
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Annual Payment Option

Operators also have the option to submit payment on an annual basis instead of a monthly basis if their total amount of duty will not exceed 500,000 GBP from the date of registration. The operator or their fiscal representative will receive their APD 2 return form covering the period from April 1 to March 31 each year. The form will need to be completed and sent to the address provided below. The return must be received by the HM Revenue & Customs office no later than the date provided on the form. The due date is April 22 unless it falls on a weekend or bank holiday. In those instances, the return must be received by the last working day prior to April 22. HMRC only accepts payments in pounds sterling (GBP), and the payable fees are to be free of all currency conversion and bank charges. For details on how to pay Air Passenger Duty, consult the HMRC page: http://www.hmrc.gov.uk/payinghmrc/apd.htm.

To apply for annual returns, operators must write to the following address:

APD Central Assurance Team
1 Park Road
Uxbridge
UB8 1RW
UNITED KINGDOM
Email: APDHelpdesk@hmrc.gsi.gov.uk

Include your expected annual APD liability for the following year.

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Occasional Operators

Operators who intend to operate 12 or fewer flights a year and have an annual APD liability less than 5,000 GBP per year may register as an "Occasional Operator," which allows them to pay on a flight-by-flight basis. This is a simplified method intended to ease the burden of payment for operators who don't travel to the U.K. often. Unlike other operators, occasional operators are not required to appoint a fiscal representative in the U.K. The typical method to provide payment for these passengers as follows:

  • On arrival to the U.K, the handler would provide the crew with the proper form. If they are unable to do so, the form can be found on the HMRC website by going to www.hmrc.gov.uk and searching for "APD6."
  • Prior to departure from the U.K. the operator would contact the APD Central Assurance team by phone (+44-1895-817339 or +44-1895-817226) or email (APDHelpdesk@hmrc.gsi.gov.uk).
  • The operator would then be provided a unique reference and provided guidance on the payment methods available to them.
  • The operator would send payment with the completed notification form to HMRC within seven days of the flight. Failure to do so could result in penalties.

Another option is to register as an as an Occasional Operator using the APD 1 Form and following the below method.

  • The operators can request monthly return cycles as opposed to completing an APD 6 Form, which is used for notifying and paying HMRC within the normal seven-day return cycle from the date of flight.
  • The monthly returns would be completed the same way as annual returns, using an APD 2 Form sent from HMRC to the U.K. representative on a monthly basis for the completion of flights during that month. The monthly return must be paid and submitted via the APD 2 Form by the date specified by HMRC on the return.

By registering as an Occasional Operator, HMRC would effectively provide the operator with more flexibility to pay their APD without the worry of returning payments within seven days of flight. Failure to pay within this time frame would otherwise warrant civil penalties.

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Exempt travelers

Travelers who are exempt from paying the APD tax:

  • Flight crew
  • Cabin attendants
  • Persons not carried for reward who are (a) escorting a passenger or goods (b) undertaking repair, maintenance, safety or security work or (c) ensuring the hygienic preparation and handling of food and drink.
  • Children below the age of two without their own seat are not chargeable passengers. However, if a separate seat is allocated before the infant boards the aircraft APD is chargeable at the full relevant rate.
  • Passengers being carried to inspect aircraft or crew (such as an FAA examiner).
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Exempt flight types

The following flight types are exempt from paying APD taxes:

  • Technical stops for fuel in which no passengers embark or disembark
  • Military flights
  • Law enforcement flights
  • Customs flights
  • Search and rescue flights
  • Humanitarian flights
  • Flights operated for public service obligations
  • Flights operated for research and training purposes
  • Flights intended as short pleasure flights of 60 minutes or less that depart and arrive at the same airport

Per the HMRC, a chargeable passenger is defined as any passenger aboard a chargeable aircraft (any aircraft with a MTOW of greater than 8,200 kilograms) regardless of whether the passenger has paid for their carriage. This means fees apply regardless of whether the flight classified as charter or private.

From January 1, 2013, direct, long-haul flights from Northern Ireland were devolved and set to GBP0. Direct long-haul classification is defined as a flight that:

  • Originates in Northern Ireland
  • The first stop is in Band B, C or D (as listed in chart below)

Flights from Northern Ireland to Band A are included in the APD calculation and are therefore subject to APD fees payable to HMRC.

U.K. Domestic flights from England, Wales, Scotland and Northern Ireland are subject to APD fees within Band A and are payable to HMRC. This includes flights to the Scottish Highlands and Islands.

U.K. domestic flights that originate from the airports listed in the Scottish Highlands and Islands are exempt from this legislation.

Notes:

  1. From April 1, 2013, APD has applied to all flights aboard aircraft of 5.7 metric tons and greater.
  2. From January 1, 2013, the rates for direct, long-haul flights from Northern Ireland were devolved to the Northern Ireland Assembly and set to £0. A direct long-haul journey from Northern Ireland is defined as:
    1. it starts in Northern Ireland
    2. the first part of the journey is to a destination outside Band A, for example, the first stop is in Band B, C or D
    For all other journeys from Northern Ireland, the above rates apply.
  3. If a class of travel provides a seat pitch that exceeds 1.016 meters (40 inches), the standard rate is the minimum rate that applies, even if it is the lowest or only class of travel.
  4. The higher rate applies to all chargeable passengers aboard aircraft of 20 metric tons or greater with fewer than 19 seats.

There are four destination bands used to determine the rate of APD for each flight. Each country is placed in a destination band that is based on the distance of that country's capital city from London. The APD rates are not figured based on the distance from the departure airport in the UK to the arrival airport.

See the following for the destination band each country is grouped into

Penalties

Penalties may be assessed if:

  • You fail to notify HRMC of your liability to register
  • You do not send in your return and payment by the due date
  • Your returns or documents submitted to HRMC contain inaccuracies

For more information about penalties, refer to these fact sheets:

For more information about your APD obligations, refer to Notice 550 "Air Passenger Duty." (http://www.hmrc.gov.uk/air-passenger-duty/index.htm)

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Sample APD calculations:

Prior to April 1, 2014

An operator taking a trip on a Challenger 300 from Manchester/EGCC to Cairo/HECA with 4 chargeable passengers onboard will be required to pay a duty of £268 GBP since Egypt is in Band B and the Challenger 300 falls in the reduced rate category (8,200-20,000 kgs MTOW). Therefore each passenger's APD liability is £67 GBP.

An operator taking a trip on a Falcon 7X from Luton/EGGW to Chicago/KMDW with 6 chargeable passengers onboard will be required to pay a duty of £1,608 GBP since the United States is in Band B and the Falcon 7X falls in the higher rate category (20,001 kgs MTOW and above). Therefore each passenger's APD liability is £268 GBP.

Starting on April 1, 2014 and beyond:

An operator taking a trip on a Challenger 300 from Manchester/EGCC to Cairo/HECA with 4 chargeable passengers onboard will be required to pay a duty of £276 GBP since Egypt is in Band B and the Challenger 300 falls in the reduced rate category (8,200-20,000 kgs MTOW). Therefore each passenger's APD liability is £69 GBP.

An operator taking a trip on a Falcon 7X from Luton/EGGW to Chicago/KMDW with 6 chargeable passengers onboard will be required to pay a duty of £1,656 GBP since the United States is in Band B and the Falcon 7X falls in the higher rate category (20,001 kgs MTOW and above). Therefore each passenger's APD liability is £276 GBP.

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