Aviation: Fuels

(asked on 29th April 2025) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential revenue from introducing a fuel tax on domestic aviation to encourage rail travel.


Answered by
James Murray Portrait
James Murray
Exchequer Secretary (HM Treasury)
This question was answered on 7th May 2025

Air Passenger Duty (APD) applies to airlines and is the principal tax on the aviation sector, since tickets are VAT free and aviation fuel incurs no duty. APD varies by distance and class of travel and is expected to raise £4.7 billion in 2025-26.

The domestic band applies to all flights between airports in England, Scotland, Wales, and Northern Ireland and is currently set at £7 for economy passengers until 31 March 2026.

The Government provides significant financial support for rail travel to enable its operation and make it an attractive option for passengers, including supporting infrastructure upgrades.

Recent examples include investment in the rollout of Pay As You Go fare structures in the West Midlands and Greater Manchester, and the delivery of the Northumberland Line in the North East. This sits alongside the biggest overhaul of the railways in a generation through the set-up of Great British Railways, which will strip out duplication and ensure taxpayers get better value for money.

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