Budget Notes

BN72 NEW AVIATION DUTY REPLACING AIR PASSENGER DUTY (APD)

Who is likely to be affected?

1. No individuals or businesses will be affected by this measure.

General description of the measure

2. Legislation will be introduced in Finance Bill 2008 to enable HM Revenue & Customs (HMRC) to proceed with the development of the new duty on aviation before its formal introduction in November 2009, when it will replace air passenger duty.

Operative date

3. The measure will have effect on and after the date that Finance Bill 2008 receives Royal Assent.

Current law and proposed revisions

4. In the 2007 Pre-Budget Report, the Government announced its intention to replace air passenger duty with a duty on aviation payable per plane. This proposed aviation duty is a new tax and as such is not currently a function of HMRC.

5. Until the main primary legislation introducing aviation duty becomes law, expected to be in Finance Act 2009, it remains outside the scope of HMRC's responsibility and consequently expenditure related to its development is restricted.

6. Paving legislation will be introduced in Finance Bill 2008 to allow HMRC to incur expenditure on the development of the new aviation duty.

Further advice

7. If you have any questions about this change, please contact the National Advice Service on 0845 010 9000. Information about Budget measures is available on the HM Revenue & Customs website at www.hmrc.gov.uk