Detailed guide: Air Passenger Duty

Overview

You need to register and pay Air Passenger Duty (APD) if you operate a fixed wing aircraft from any UK airport that:

• weighs 5.7 tonnes or more
• is fuelled by kerosene
• carries passengers, whether they’ve paid for the flight or not

Registration

You can register any time before your flights begin. The latest you can register is 7 days after a chargeable flight takes place.

If your business is based outside of the UK, you must appoint a fiscal representative. This can sometimes be just for administrative purposes. If you don’t appoint someone, your handling agent may be made jointly and severally liable for future debts and you may be issued a penalty.

To register you should complete and send the online form Air Passenger Duty form APD1.

If you don’t register, HM Revenue and Customs (HMRC) may issue you with a penalty.

Notify changes or cancel your registration

If any of your business registration details change you must notify HMRC within 30 days (or within 7 days for fiscal representative changes). You should provide as much supporting information as possible.

You should return your certificate of registration with any amendments clearly marked and signed to the Air Passenger Duty team at HMRC.

If you stop operating chargeable flights you must notify HMRC in writing.

Making 12 or fewer flights a year

If you’re likely to make 12 or fewer flights a year from UK airports and your estimated duty liability for a year is less than £5,000 you may be eligible for the Occasional Operator Scheme.

If you’re eligible for this scheme you:

• don’t have to register for APD in advance
• can pay APD for flights made over a 24 hour period by completing the combined registration and notification form APD6 within 7 days of the departure date

Rates

You pay APD for each chargeable passenger you carry.

The passenger will fall into a specific tax band, A or B dependent on their final destination.

For each band there are 3 rates of duty, depending on the passenger’s class of travel:

• reduced – applies to passengers that travel in the lowest class of travel, unless their seat pitch is more than 40 inches
• standard – applies to passengers in any class other than the lowest class of travel or where seat pitch is more than 40 inches (unless higher rate conditions are met)
• higher – applies to passengers that travel in an aircraft that weighed more than 20 tonnes and is equipped to carry fewer than 19 passengers

Private jets can use a different method to measure seat pitch.

See a breakdown of Air Passenger Duty rates.

Exemptions

There are some people and flights exempt from APD. A full list of exemptions is provided in Excise Notice 550: Air Passenger Duty.

Rates for flights leaving from Northern Ireland

There are different rates that apply for passengers on certain flights leaving Northern Ireland airports.

How to calculate your liability

To calculate your duty liability :

• work out the number of passengers carried to each destination band (deducting covered by an exemption)
• identify the class of travel for each and whether they were carried in an aircraft that attracts the higher rate
• apply the relevant rate to this number to arrive at the amount of APD due

Special accounting schemes

If you can’t calculate your APD based on actual passenger numbers from your existing systems you may need to use a special accounting scheme.

Before you can use this type of scheme, you must have HMRC approval. You should send your proposal to HMRC and obtain approval before you start using a special accounting scheme.

Records you must keep

You should keep business records for 6 years and they should be available for HMRC to see whenever necessary. You can use any format as long as copies can be easily produced.

The records you must keep must demonstrate that the amount you’ve declared on your return is a true and fair account of your APD liability.

As well as your normal business records, you need to keep:

• an APD account detailing the monthly summary of passengers carried and the APD due
• other specific records such as documents proving passengers aren’t chargeable for any reason, flight interruption manifests etc

You may also need to keep additional records if you are allowed to work out your duty using a special accounting scheme.

Returns and payments

Once you’ve registered HMRC will send you a notice to file, usually monthly, to let you know the deadline for submitting your return.

If the deadline is a bank holiday or weekend, the return and payment should reach HMRC by the last working day before the deadline. If your return and payment are late, HMRC may issue a penalty.

HMRC can ask you to pay a cash deposit or bond if they think there’s a risk you won’t pay your tax or duty on time.

You should send your return online and pay any APD due at the same time.

Incorrect returns

If you make a mistake, there’s guidance on how you can correct errors on returns.

If the amount you pay is later found to have been incorrect and too low, HMRC will charge you interest for unpaid APD. Depending on the circumstances of the mistake, you may also be issued with a penalty.

Annual accounting

An annual accounting scheme is available, which lets you make just one return each year. To qualify for the scheme the annual total of APD your business is likely to pay must be £500,000 or less.

To apply write to the APD Central Assurance Team.

Appeal a penalty

You can appeal a penalty by asking for an independent review. If you’re still unhappy with the outcome, you can take your complaint to a tribunal.

Reasonable excuses

HMRC will look at your case on an individual basis if you have a reasonable excuse for making the error. If we agree you have a reasonable excuse, you won’t have to pay the penalty.