Campaign group Transport & Environment is urging the UK government to start taxing aviation fuel, claiming £5.9 billion could have been raised in 2023 if it were levied at the same rate as road fuel.
The group says that, “incredibly”, unlike British drivers, hauliers, rail operators and farmers, airlines do not pay tax on the fuel they burn. “For the sake of the economy and the environment, it’s time to end the
unfair anomaly that allows the aviation sector to pollute with impunity
whilst not paying any tax,” it said.
Transport & Environment calculated that if aviation fuel had been taxed at the same rate as road fuel in 2023 – 53p per litre – and applied on all flights departing UK airports, it could have raised up to £5.9 billion in taxes. If applied to only domestic and European flights, it would have accrued £1.9 billion.
Ahead of the UK’s October Budget, Transport & Environment is urging the Chancellor to introduce a tax on aviation fuel at the introductory rate of 9p per litre from 1 January 2025 – a rate proposed by the Green Alliance. This should then rise annually until it matches road fuel duty by 2030, it says.
The 9p rate applied to aviation fuel in 2023 would have raised revenue of £1.1 billion if applied to all flights departing UK airports.
“There is a common myth that jet fuel cannot be taxed for legal reasons, but this is simply not true. It is, and always has been possible to tax fuel used on domestic routes,” says Transport & Environment. Furthermore, since the post-Brexit Trade and Cooperation Agreement was signed with the EU in 2020, it has also been possible to apply fuel duty to flights to any EU destination, it added.
The group says it might also be possible to tax fuel used on other international routes depending on the wording and clauses of individual air service agreements.
