Families across the UK are set to face the highest-ever tax rates on flights, as Labour imposes a multi-billion-pound levy on holidaymakers. A new analysis reveals that air fare levies for a family of four travelling to popular destinations, such as Walt Disney World in Florida, will exceed £400 for the first time following the tax hike.
The revelation comes just ahead of “Sunshine Saturday,” the traditional busiest day of the year for holiday bookings, when millions are expected to secure foreign breaks. Critics have argued that the government’s move makes a mockery of Labour’s claim not to be raising taxes on “working people” and prioritising economic growth, especially as the hike is expected to negatively impact the already struggling travel industry.
Industry concerns and job cuts
Business leaders within the sector are already contemplating cuts to jobs and investments, as the effects of Rachel Reeves’s National Insurance raid on businesses are felt. The Chancellor’s recent Budget saw a 15 per cent rise in Air Passenger Duty (APD), a controversial tax also known as the “holiday tax” that is applied to flights departing from the UK. This increase is more than five times the current inflation rate of 2.6 per cent.
Research by the TaxPayers’ Alliance estimates that by April 2026, when the tax hikes are fully implemented, inflation will have risen by approximately 111 per cent since the APD was first introduced in 1994. Over the same period, APD for short-haul European destinations, such as Spain, will have surged by 200 per cent. For long-haul trips, the increase is even more dramatic, with levies on flights rising by 920 per cent. Ultra-long-haul journeys will face a staggering increase of 960 per cent.
The tax hikes are expected to generate an additional £2.5 billion from APD between 2026 and 2030, significantly boosting government coffers.
APD vs inflation: The growing gap
Critics have slammed the government for claiming that APD has not risen in line with inflation, a justification used by Reeves when she announced the increase in her Budget speech. Darwin Friend, spokesperson for the TaxPayers’ Alliance, expressed frustration, saying: “While the Prime Minister is able to swan off around the world without the need to pay APD from his own pocket, taxpayers funding his travel have to work even harder to afford an annual holiday.”
Mr Friend called for a freeze on the tax, arguing that this would align it more reasonably with inflation rates and provide relief for UK holidaymakers.
Political repercussions
The impact of the hike is not just limited to the travel sector. Conservative transport spokesperson Gareth Bacon weighed in, saying: “Farmers, pensioners, small businesses, and now holiday-goers. Keir Starmer wants them all to pay to fund his inflation-busting pay rises for his union paymasters.”
Former British Airways chief executive and current head of the International Air Transport Association (IATA), Willie Walsh, also voiced his concerns, highlighting the broader impact of the tax hike on the UK’s aviation sector. He stated: “British passengers are rightly fed up with paying ever-higher rates of APD. But APD is not just a tax on holidays – it drags down all of the UK.” Walsh further questioned why Labour’s government, which has labelled growth as its “number one priority,” would allow APD hikes that risk stifling the aviation industry, which contributes £127 billion to the UK economy and supports 1.6 million jobs.
Tim Alderslade, CEO of Airlines UK, which represents major carriers like BA, Virgin, easyJet, and Tui, warned that the hike would only make the UK less competitive and put further strain on the travel industry. He added: “The increases will hit working people in the pocket and make it harder for airlines to put on and sustain new routes.”
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How the APD hike affects families
The increased APD rates will have a direct impact on families looking to travel abroad. For example, a family of four flying to Disneyland Florida will see a tax of £408 (or £102 per person) – a 16 per cent increase on current rates. For ultra-long-haul destinations like Australia, the family would face a £424 charge (or £106 per person). Short-haul destinations such as Spain will also see a rise, with a family of four paying £60 (or £15 per person) – a 15 per cent increase.
Since its introduction in 1994, APD has grown significantly. At that time, the tax was £5 for destinations in the European Economic Area and £10 for long-haul flights. Had it increased in line with inflation, it would now stand at just £10.31 and £20.62, respectively. The current categories of APD are far higher than these inflation-adjusted figures.
The government’s defence
In response to the backlash, a Treasury spokesperson defended the government’s decision, stating: “Unlike other sectors, no VAT applies to plane tickets, and there is no tax on jet fuel. It is only fair that the aviation sector plays its part in helping address the £22 billion hole in the budget and restoring economic stability.”
The spokesperson added: “Changes to the rate of APD have significantly fallen behind inflation in recent years, and it is only right that the aviation sector contributes to the UK’s recovery.”
As the debate continues, the tax hike on flights remains one of the most controversial aspects of Labour’s fiscal policy, with significant implications for both the travel industry and UK families planning to travel abroad.
