The Budget and Holidaymakers
Last Wednesday was, of course, the budget. I have desisted a quick response because there is usually something lurking that takes a while to ferret out but so far those with more financial nous than me haven’t spotted more to affect tourists than those below.
To listen to the industry you would have thought it was terrible because the chancellor did nothing about Advanced Passenger Duty (APD), and the tax rises he announced some time ago. The chancellor didn’t rescind the tax which is what the industry had been hoping so the rise forecast for November will still go ahead. That means on a short haul flight the APD will rise to £11 (and from 2010, £12) If you go to the US it will rise to £40 (2010 £60) and to somewhere like Australia or New Zealand it will be be £85 in 2010. If you fly business class then next year the rise could be as much as £170.
Dermot Blastland of Thomson Holidays pointed out that by 2010, a family going to the Caribbean could end up by paying an additional £600 in taxes and Mark Tanzer of ABTA pointed out that APD generates £2 billion for the exchequer.
So the taxes for flyers that had already been announced stay in place.
The change that hadn’t been expected will hit those people who have second homes which they make available for holiday lets in the UK. At the moment they get tax breaks but these will disappear from next April. This is expected to affect about 100,000 people Some doom laden forcasters are saying that this will force down house prices still further. Conversely, those having holiday homes abroad which they let will be entitled to claim retrospectively the same sort of tax breaks until the phasing out next April.
As usual with the budget, some you win and some you lose but the person who wins the most is always the chancellor!