Wednesday, February 07, 2007

United Kingdom: Increased Passenger Tax faces legal challenge

Airlines and travel companies are preparing to launch a legal challenge to the British government’s imposition of air passenger duty, a tax on flight tickets. The tax was doubled by the finance minister, Chancellor Gordon Brown, in a statement in December and the increase came into effect last week. The rise in the tax caused chaos at check-in desks on February 1, as it applied to tickets already bought by passengers before the chancellor’s announcement, and had not been taken into account by the airlines at the time. Some passengers who had already bought long-haul tickets were required to pay an additional £40 (US$80) in extra tax when they arrived at check-in desks last Thursday. Opponents of the air passenger duty say it amounts to retrospective tax and could be ruled illegal in a court. They also argue that as the increase had not been debated and passed by Parliament in a finance bill, it has no legal status anyway and passengers are not obliged to pay it. A third argument is that the air passenger duty is a tax on airlines, not on individual tax payers, and airlines are only passing on the cost to passengers in a fare increase rather than paying it out of company profits.
Source: Browne. Read the full article here:

(Originally posted by Michael Wukoschitz)