Claiming tax for unused flights can be costlyAir Passenger Duty often kept by airlines

31 March 2009

Passengers trying to claim back their Air Passenger Duty (APD) on unused flights are often being charged administration fees more than twice the value of the tax – while the unclaimed APD remains with the airlines.

APD, a government excise duty, is payable to the Treasury by UK airlines, most of whom pass the charge on to their passengers. The tax is normally taken by the airline at the time of the ticket sale, but airlines only pay this tax to the government once the flight has taken off.

Administration fee higher than tax

Which? Travel contacted eight major airlines and found that when passengers do reclaim the tax on their unused flight, seven of the airlines charge an administration fee – which is more than the total APD originally paid. Current APD charges (although set to increase further on 1 November 2009) stand at £10 for short-haul economy flights, rising to £20 for all other classes. For long-haul passengers, APD is £40 in economy and £80 in other classes.

No charge from Easyjet

Of the airlines we contacted, we found Easyjet was the only airline that does not charge to reclaim APD. All other airlines levied charges between £15 and £40, with British Airways (BA) charging a different fee (£15-£30) depending on the ticket type.

Charge outweighs fee 

The findings illustrate that if a passenger tries to reclaim the APD from a short-haul flight, in most cases the admin charge outweighs any money reclaimed from the airline. Flybe, BMI and Ryanair charge an admin fee per person - £25, £25 and £15 respectively. Thomson and charge a flat fee per booking, with being the most expensive, at £40 compared with Thomson's £25.

A spokesperson for the Treasury confirmed that the money generated from APD is not collected from the airline until after a flight has departed. Passengers who cancel their flights and do not attempt to reclaim their APD will not automatically have their money reimbursed - they must apply to the airline for a refund.

Which? Travel was unable to ascertain how many people fail to travel on booked flights and therefore cannot estimate the value of unclaimed APD that remains with the airlines.

Fees should be proportionate

Amanda Diamond from Which? Holiday said: ‘We would like to see all airlines either remove the administration charge for reclaiming APD on unused flights or charge a proportionate fee. We believe it is the right of the passenger to receive a refund of this government tax and airlines should not be allowed to think they automatically qualify as the beneficiary of this tax.’

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