ITM reveals support for APD

Results of taxation survey released

The UK and Ireland Institute of Travel Management (ITMInstitute of Travel Management (UK and Ireland): A professional body for buyers, managers and suppliers of business travel in the UK and Ireland, with 1,000 members from large corporates, government departments & NGOs, SMEs and travel suppliers such as airlines, hotel companies, rail, car rental, technology and travel management companies (TMCs).) has uncovered "surprising support" for the plans of Alistair Darling, Chancellor of the Exchequer, to increase Air Passenger Duty (APDAir Passenger Duty (UK only): An excise duty charged on the carriage of passengers flying on an aircraft with an authorised take off weight of more than ten tonnes or more than twenty seats. Due when the aircraft first takes off on the passenger’s flight and is payable by the aircraft operator.).

But according to the ITM's survey of 185 travel and meetings buyers, support depends on whether money generated will go into developing ‘greener' aviation or not.

The ITM said the support is surprising "even in light of the impending Emissions Trading Scheme (ETSEmissions Trading Scheme: Effectively an emissions market where allowances are traded as units of volume e.g. one tonne of carbon dioxide. Participating companies are allocated a number of allowed emissions units of each gas. A company may emit more by purchasing units from the market. Similarly, a company may sell units if they are in excess. The total number of allocation units is fixed and regulated by central and EU government. An ETS imposes a limit on the total emissions according to reduction targets, while allowing companies flexibility. (Source: www.defra.gov.uk)) entry," itself a system for imposing emissions reductions.

The survey also revealed "widespread confusion" over how to apply the 2.5% reduction in VAT from 17.5% to 15%, effective this week, to the travel and meetings billing process.

Paul Tilstone, ITM's chief executive, said: "The increases in APD and the fuel subsidies provided to the aviation industry suggest a confused approach which is not designed to change behaviour, rather to simply raise cash. This is particularly harsh at this difficult time for this sector."

Colin Goldney, ITM Research's partner, suggested the government provide guidance on the application of VAT.

"With respondents approximately split 50/50 on whether their service providers apply VAT to certain travel and meetings transactions, it is clear that the sector needs educating and government needs to address this issue," said Mr Goldney.

The ITM is planning an event in June focusing on the application of taxation in travel and meetings management.

www.itm.org.uk