UK APD in 2016: Regulations & New Costs

> | April 12, 2016 | 0 Comments
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UK APD in 2016: Regulations & New Costs
Advance passenger duty (APD) is a per passenger duty that must be paid to HM Revenue & Customs (HMRC) for qualifying business aircraft departures from most UK airports. There are different procedures for registering for UK APD, and payment methods vary. It’s important for business aircraft operators traveling to the UK to be mindful of APD requirements as penalties may be in store for those not in compliance.

The following is an overview of what you need to know:

1. APD basics

UK APD for general aviation (GA) has been in place since 2013 and applies to all passengers departing the UK on fixed wing aircraft fueled with kerosene and weighing 5.7 tons or more. APD is applicable to passengers, but not crew, of both private non-revenue and charter (non-scheduled commercial) flights.

2. APD bands

As of April 1, 2015, APD charges have been based on one of two bands — with Band A covering flights of up to 2000 miles and band B covering flights over 2000 miles. Previously, there had been four separate bands. For each band (A and B), three different rates of duty are applicable, depending on the passenger’s “class” of travel. A “reduced” rate covers passengers with a seat pitch op up to 40 inches, a “standard” rate applies to passengers with seat pitch over 40 inches, and a “higher” rate applies to passengers aboard aircraft weighing more than 20 tons and equipped to carry fewer than 19 passengers. As most GA flights qualify for the “higher” rates, this equates to 78 £ per passenger for band A and 438 £ per passenger for band B, based on the latest April 1, 2016, APD increase.

Current APD rates
Bands
(approximate distance in miles from the UK)
Reduced rate
(lowest class of travel)
Standard rate
(other than the lowest class of travel)
Higher rate
Band A
(0-2,000 miles)
£13 £26 £78
Band B
(over 2,000 miles)
£71 £142 £426

 

As of April 1, 2016
Bands
(approximate distance in miles from the UK)
Reduced rate
(lowest class of travel)
Standard rate
(other than the lowest class of travel)
Higher rate
Band A
(0-2,000 miles)
£13 £26 £78
Band B
(over 2,000 miles)
£73 £146 £438

3. APD costs

UK APD rates have escalated for GA since being introduced three years ago. For example, a flight from Stansted (EGSS) to Dubai (OMDB) with 20 passengers had cost £8,600 in total APD duties in 2015, but with the increase in charges for 2016 those costs are now £8,760. Charter operators, in particular, need to be aware of current APD costs, to ensure that charter quotes do not overlook these quite significant charges.

4. Payments

There are different methods of paying APD charges, depending on the frequency of your flights. If you’re likely to make more than 12 flights per year from the UK, you must register with HMRC and will be subject to monthly reporting. GA operators likely to make 12 or fewer flights per year from UK airports, and have estimated annual duty liabilities less than 5000 £, may be eligible for the Occasional Operator Scheme. If you’re eligible for this scheme you:

  • Do not have to register for APD in advance
  • Can settle APD duty payments made over a 24 hour period by completing a combined registration/notification form within seven days of the departure from the UK

5. Registering for UK APD

Operators may register for APD before a departure from the UK takes place, but the latest you may register is seven days after a chargeable flight takes place. To do this, Form APD1 must be completed and returned to HMRC. A certificate of UK APD registration will then be forwarded to you. If you don’t register HMRC may issue penalties. Note that if your business is based outside the UK you must appoint a UK-based fiscal representative, such as our organization, to settle APD debts. If you do not appoint a UK-based representative, your handling agent may be made jointly and severally liable for future debts.

6. Changes to registration

Operators must notify HMRC, within 30 days, if any of their business registration details change. In the event that your UK-based fiscal representative changes, this must be reported to HMRC within seven days. And, if you cease to operate chargeable flights to/from the UK you must also notify HMRC of this in writing.

7. Exceptions and special considerations

Certain passengers are exempt from UK APD, and a full list of these exemptions can be found on HMRC’s website. If you’re tech stopping in the UK, and on the ground for two hours or less, UK APD charges are not applicable. Note that there are different APD rates applicable for certain flights leaving Northern Ireland airports.

8. Recordkeeping and reporting

Those who do not qualify for the Occasional Operator Scheme will need to report monthly summaries of passengers carried and APD due. These records, which should be kept for six years, must demonstrate the amounts you’ve declared on your return and accurately reflect your APD liability. Once you’ve registered, HMRC will send you or your fiscal representative a monthly return, and this must be submitted and returned by the deadline indicated. If your return and payment are late, penalties may be imposed, and interest will be charged on late payments.

9. Additional information

For more information on UK APD rules, requirements, and payment options see the HMRC site.

Conclusion

As the UK is a very popular destination for GA flights, many business aircraft operators are impacted by UK APD regulations and associated costs. It’s important for occasional operators to be aware that APD payments must be submitted within seven days of a qualifying flight and that you’ll need to have a UK-based representative pay these fees on your behalf. Also, it’s important to take note of the price changes that went into effect on April 1.

Questions?

If you have any questions about this article or would like assistance with the UK APD, contact Juan Muniz at juanmuniz@univ-wea.com.

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Category : Best Practice

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About

Lukas Marrow served as Master Regulatory Services Specialist for Universal until June 2016. He has extensive knowledge of the old, new, and updated aviation regulatory issues that affect general aviation (GA). Lukas has a bachelor’ degree in business management with a minor in safety, and he’s a licensed and active private pilot.

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