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Almost 300% Tax?

Practical Issues
Urbandreamer
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Re: Almost 300% Tax?

#123340

Postby Urbandreamer » March 9th, 2018, 6:31 am

Actually I have known of such high levels of taxation. There was a point when Indian companies only bought second hand machine tools because the import tax upon new machines was of the order of 400%.

However I totally agree with your rant. Most, if not all, taxation is iniquitus.

Taxation at these sort of levels is normaly justified with the argument that the state wishes to control/influence/discourage certain things. The question that allways springs to my mind at that point is how they square the circle when charging higher rates of income tax. Do they wish to discourage work?

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Re: Almost 300% Tax?

#123350

Postby PaulBullet » March 9th, 2018, 8:19 am

Booze has a higher tax than that, its £28.74 of Spirit Duty per litre of pure alcohol so a bottle of vodka is 11.50 then you add vat at 20% so you are close to 14 quid before you actually make it, pack it and sell it

When the super markets do there deals, i worked it out that about £1 was for everything else and £14 was tax

Paul

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Re: Almost 300% Tax?

#123351

Postby vrdiver » March 9th, 2018, 8:19 am

Unfortunately, flight taxes are not calculated as a % but at a flat rate, depending on destination and type of seat / aircraft.

Take a look at https://www.gov.uk/government/publicati ... enger-duty and specifically https://www.gov.uk/guidance/rates-and-a ... enger-duty to see what the government are charging.

There may be additional charges levied by the destination government, or airline "handling and administration" adjustments as well.

Whilst the tax take to the government is clear, there is nothing to say it has to be passed on to the passenger exactly as incurred per seat, so the airline will pay the tax due, but add a tax levy to each ticket based on their own pricing model.

One way to avoid APD would be to fly out of Inverness, or delay the trip (by a few years!) and hope that regional competition or Brexit pressures make APD cuts a reality ( https://insideflyer.co.uk/2017/04/end-a ... now-sight/ ).

In the meantime, consider the money gone and enjoy the flight!

VRD

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Re: Almost 300% Tax?

#123466

Postby Lootman » March 9th, 2018, 1:04 pm

vrdiver wrote:Whilst the tax take to the government is clear, there is nothing to say it has to be passed on to the passenger exactly as incurred per seat, so the airline will pay the tax due, but add a tax levy to each ticket based on their own pricing model.

One way to avoid APD would be to fly out of Inverness

Why Inverness?

The first thing to note is that it isn't just taxes. It's also fees and Heathrow, in particular, applies what are probably the most expensive airport fees on the planet. Now from the passenger's point of view, whether an "extra" is a tax, fee or fuel surcharge may not matter. For that matter, how it breaks down between fare and fees/taxes may not matter either, although it certainly matters to the airline because it receives net only the former.

Note also that the tax goes up both by distance and by class of travel, the worst being long-haul in Business or First. You could be looking at up to 800 quid in extras to fly to the US West Coast and back, for instance. And even "free" tickets using Avios or similar will attract those same extras (at least on BA and Virgin - less so on foreign airlines who sometimes absorb them for award flights).

That said, there is an argument that high extras drives down fares, since otherwise the total price looks shocking to passengers. As an example last year I got a round-trip flight to LA for about 1,500 quid in BA Club World, of which about half was extras, meaning that the fare very good (for me; not for BA, obviously).

Finally, your tip about commencing long-haul flights from outside the UK can work well. Dublin and Amsterdam and good choices for that. But you need to be careful - you have to book LHR-AMS on a separate ticket from AMS-JFK (say). That in turn means you need to allow more time for your connection as, if you miss your second flight, you may get no help from the airline. To be safe, when I have done that, I travel the night before and stay in a hotel.

But then when you add up the cost of the extra flight, the hotel and all that extra time, you might just think that taking a non-stop from LHR and paying the tax isn't so bad.

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Re: Almost 300% Tax?

#123473

Postby vrdiver » March 9th, 2018, 1:19 pm

Lootman wrote:
vrdiver wrote:Whilst the tax take to the government is clear, there is nothing to say it has to be passed on to the passenger exactly as incurred per seat, so the airline will pay the tax due, but add a tax levy to each ticket based on their own pricing model.

One way to avoid APD would be to fly out of Inverness

Why Inverness?

Because the Highlands and Islands have an exemption* on APD, and Inverness (which is in the region) has international flights...



*https://www.gov.uk/government/publications/excise-notice-550-air-passenger-duty/excise-notice-550-air-passenger-duty

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Re: Almost 300% Tax?

#123477

Postby Lootman » March 9th, 2018, 1:24 pm

vrdiver wrote:
Lootman wrote:
vrdiver wrote:Whilst the tax take to the government is clear, there is nothing to say it has to be passed on to the passenger exactly as incurred per seat, so the airline will pay the tax due, but add a tax levy to each ticket based on their own pricing model.

One way to avoid APD would be to fly out of Inverness

Why Inverness?

Because the Highlands and Islands have an exemption* on APD, and Inverness (which is in the region) has international flights...

*https://www.gov.uk/government/publications/excise-notice-550-air-passenger-duty/excise-notice-550-air-passenger-duty

Aha, thank you, didn't know that.

Too bad that Inverness is so far from everywhere else and doesn't have too many direct flights. Although I did once fly from Exeter to Inverness non-stop, which might just be the longest non-stop flight that is entirely within Great Britain.

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Re: Almost 300% Tax?

#123710

Postby vrdiver » March 10th, 2018, 9:20 am

FredBloggs wrote:The obvious question is, why not book Inverness > Muscat and just board at Heathrow, forgetting the Inverness to Heathrow flight? I guess it is contrary to the (British Airways) T&C's but I doubt they could stop you doing this?

When you turn up at Heathrow you will be denied boarding, having been declared a "no show" at Inverness and your flight booking cancelled.

If it was that easy, airlines would start all their flights from Inverness, (perhaps flying a 6 seater to Heathrow, with 350 booked on it!) and keep the tax!

The tax regime applied to flights is an interesting area to watch as Brexit approaches (no argument on whether Brexit is good or bad - that's for the Polite Discussions forum) as it's an area of regulation and taxation that could be a political football. Air Passenger Duty may come under pressure as airports and regions compete for business, especially if the tax becomes devolved (google APD devolution for a flavour of the current debate).

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Re: Almost 300% Tax?

#123719

Postby dspp » March 10th, 2018, 9:49 am

You are discussing a high rate of tax (and fees and duties) on an unusual purchase by a single person: a flight to Oman.

Try checking out the tax etc on a common purchase by almost every adult in the UK: petrol & diesel

https://www.racfoundation.org/data/taxa ... -data-page

At the 15/2/16 point tax was approx 74% of the pump price. That is equivalent to the rate you are worried about in the Oman flight if you do the sums the same way. The difference is we pretty much all pay that all of the time. Right now it is down to 'only' approx 64%.

Taxes are there because governments claim to be the only sovereign. At heart that is a discussion over the monopoly of power. They pluck the goose with the least amount of hissing, but they never give the goose an option. At heart that is also the culture war over the US second amendment.

regards, dspp

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Re: Almost 300% Tax?

#123741

Postby vrdiver » March 10th, 2018, 11:31 am

FredBloggs wrote:So, you take a flight the day before from Manchester to Inverness? Very big saving for a family of four travelling together, about GBP 800.

Indeed.
it becomes a whole new sport to figure out the best route (and date) to get from where you are to where you want to be. There should be an app for that!

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Re: Almost 300% Tax?

#124006

Postby SteelCamel » March 11th, 2018, 4:53 pm

FredBloggs wrote:So, you take a flight the day before from Manchester to Inverness? Very big saving for a family of four travelling together, about GBP 800.

Nope - you'll be charged APD on the Manchester to Inverness flight. It's only flights from the Highlands and Islands that are exempt.

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Re: Almost 300% Tax?

#124017

Postby Lootman » March 11th, 2018, 5:47 pm

SteelCamel wrote:
FredBloggs wrote:So, you take a flight the day before from Manchester to Inverness? Very big saving for a family of four travelling together, about GBP 800.

Nope - you'll be charged APD on the Manchester to Inverness flight. It's only flights from the Highlands and Islands that are exempt.

I believe that APD would not be charged if the two legs were booked separately. But would be if they were booked as one itinerary.

The second airline would have no idea that you made the first flight, and so would not know to apply the tax.

The problem is what I cited earlier. Since it's not an official connection in Inverness, if your first flight is late and you miss the second flight, you may have no recourse.

So book separately and allow a lot of time at Inverness Airport, maybe even overnight as Fred suggests. There's a nice castle near Inverness Airport you can visit.

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Re: Almost 300% Tax?

#124167

Postby pochisoldi » March 12th, 2018, 10:10 am

vrdiver wrote:One way to avoid APD would be to fly out of Inverness, or delay the trip (by a few years!) and hope that regional competition or Brexit pressures make APD cuts a reality ( https://insideflyer.co.uk/2017/04/end-a ... now-sight/ ).


Another option is to fly somewhere where the UK APD is less than your target destination, and then have a stopover of at least 24hrs.
Even if all the flights are on the same PNR/itinerary, the 24hr stopover turns the ex-UK flight into a short haul one to Amsterdam/Frankfurt/wherever for APD purposes.

https://www.gov.uk/government/publicati ... enger-duty
section 4.3

If 2 or more international flights are connected, it’s the final destination of the connected flight which determines the duty liability. If 2 or more international flights are not connected, then the duty liability is determined by the last destination which is not followed by a connected flight. Therefore a passenger whose ultimate destination is in a destination band with a higher rate will be liable to the lower rate of duty if he stops en route at a destination in a lower rate country for longer than 24 hours. For example:


One of the examples shown is a flight to Rio via Madrid with >24hrs in Madrid. Also the class between Madrid and Rio becomes irrelevant as is it out of scope for UK APD. So you could fly London-Madrid (cattle), Madrid-Rio (Business) and you would pay cattle class APD London-Madrid, rather than Business rate APD London-Rio.

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Re: Almost 300% Tax?

#124239

Postby Lootman » March 12th, 2018, 2:02 pm

pochisoldi wrote:One of the examples shown is a flight to Rio via Madrid with >24hrs in Madrid. Also the class between Madrid and Rio becomes irrelevant as is it out of scope for UK APD. So you could fly London-Madrid (cattle), Madrid-Rio (Business) and you would pay cattle class APD London-Madrid, rather than Business rate APD London-Rio.

Yes, did a similar thing a few weeks ago. BA Economy to Dublin and then, the next day, Aer Lingus to the US west coast in Business. Tax was trivial compared with going Club World out of LHR.

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Re: Almost 300% Tax?

#124261

Postby Pastcaring » March 12th, 2018, 3:06 pm

At the moment we are looking at having a holiday in the UK.

Perth being a small airport the hub airports are usually Singapore and Bangkok.I like to connect through Amsterdam to get to Newcastle.Connection times are bad so that is off the list

BA don't fly to Perth but code share is Qantas and Carthay pacific.So Perth/Singapore/LHR then Newcastle.Holiday in Singapore to break it up.

Flying back choices are NCl through LHR then Haneda ( Tokyo ).Tokyo back track to Hong Kong then on to Perth,or NCL/HKG/PER.Stop off and holiday in all of them

The price at the bottom was A$1300,a good price. However the airfare was $110 ,and taxes ,fuel surcharges etc $1190.Something seems very wrong there.

On the petrol the excise here is around 40 cents a litre and GST ( VAT ) is around 10 cents.Petrol was $1.20 per litre today ,around 67 pence.

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Re: Almost 300% Tax?

#124309

Postby pochisoldi » March 12th, 2018, 5:14 pm

FredBloggs wrote:I need to have rant about this.

Mrs Bloggs has just booked a flight from Manchester to Oman. The flight? GBP 125. The tax? GBP 296. How on earth have arrived at this? Is there anything else, anywhere in the entire world subject to this level of totally unacceptable, punitive taxation? Even things that kill people like tobacco and alcohol bears nothing like this level of tax.

Regards

One very hacked off Bloggs.


How about this one:

A tax payer has £1000 of savings income, and their other income amounts to £44000. Additional tax due: NIL
A tax payer has £1000 of savings income, and their other income amounts to £44001. Additional tax due: £100.20

That's a marginal rate of 10020%!

Why? The extra pound takes the tax payer into the 40% band and their savings allowance drops from £1000 to £500.
This means 20% is due on £499, and 40% tax is due on the £1 that kicked them over the threshold.

How do you fix it?
Short term:
Give £1 to charity, and claim the gift aid.
Longer term:
Pester the government into changing the rules.
Instead of giving a £1000 or £500 savings allowance, give taxpayers a tax credit of the lower of £200 or the actual tax due on their saving

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Re: Almost 300% Tax?

#124657

Postby SteelCamel » March 13th, 2018, 9:32 pm

Lootman wrote:
SteelCamel wrote:
FredBloggs wrote:So, you take a flight the day before from Manchester to Inverness? Very big saving for a family of four travelling together, about GBP 800.

Nope - you'll be charged APD on the Manchester to Inverness flight. It's only flights from the Highlands and Islands that are exempt.

I believe that APD would not be charged if the two legs were booked separately. But would be if they were booked as one itinerary.

That's not the case, though you'll be charged the amount for a domestic flight. I sometimes fly from Inverness to Manchester, and the outward flight is normally cheaper than the return, as the return flight has APD added on. Flying from Inverness to an English airport is exempt, flying from an English airport to Inverness is not.

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Re: Almost 300% Tax?

#124662

Postby Lootman » March 13th, 2018, 9:43 pm

SteelCamel wrote:
Lootman wrote:
SteelCamel wrote:Nope - you'll be charged APD on the Manchester to Inverness flight. It's only flights from the Highlands and Islands that are exempt.

I believe that APD would not be charged if the two legs were booked separately. But would be if they were booked as one itinerary.

That's not the case, though you'll be charged the amount for a domestic flight. I sometimes fly from Inverness to Manchester, and the outward flight is normally cheaper than the return, as the return flight has APD added on. Flying from Inverness to an English airport is exempt, flying from an English airport to Inverness is not.

Sure, but my point was that if you booked from, say, Inverness to DUB or AMS and then long-haul from there, then you pay nothing in UK APD.

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Re: Almost 300% Tax?

#124669

Postby Lootman » March 13th, 2018, 10:21 pm

FredBloggs wrote:The snag with that plan is that when I checked the prices on DUB and AMS to Muscat prices they are virtually the same as the MAN to Muscat fare. Somebody somewhere is making extra profit on those routes it seems. Only the Inverness to Muscat via Heathrow route is significantly cheaper.

Agreed. in reality the total fare quoted just bakes in the taxes and fees and so doesn't make much difference

Except for miles/awards flights where the flight is "free" but you get stung for all the extras.

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Re: Almost 300% Tax?

#124735

Postby Pastcaring » March 14th, 2018, 10:16 am

Bit of old times.

All the adverts down here were for flights to London.

Then one or two years ago cheap flights to Dublin and Athens were all the rage.Iwonder if that has anything to do with the taxes.

Even today a flight to Dublin is around $2-300 less than a flight to London.

On a nominal/real price basis then my first flight was from Ncl to Amsterdam on the old Glasgow Newcastle A/dam British Caledonian flight.Probably the only international flight out of Newcastle at the time.The cost was around 75 quid return, more than a weeks wages then.

Stories around Damrak and Chinatown at the time were if you turned up at Schipol then TWA would fly you to New York for around a fiver just to fill empty seats.Don't know how you got back.

Stories in Bangkok at the time were if you wanted to get back to Europe then you turned up at the Lot or Aeroflot offices on Wireless road,asked how much it was to Berlin,they replied how much western currency have you got in your pocket.Desperate for western currency .

Back to nominal/real prices,in the 1980's it would cost around 5 - 6 weeks wages for a return flight from Perth to London,now it costs around 3 - 4 days average wages..Everything is so cheap these days ( put my tin hat on )


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