NEW SURVEY REVEALS UK’S LEAST POPULAR STEALTH TAXES: FUEL DUTY, VAT & AVIATION TAX COME OUT ON TOP
A day ahead of the Chancellor’s Autumn Statement when the Government will outline its draft financial plans for 2012/13, a new ComRes survey explores which ‘stealth taxes’ Briton’s support or oppose. It finds that the British people’s least popular stealth taxes are fuel duty, VAT Air Passenger Duty and the Climate Change Levy – all enjoying the support of less than 1 in 4 people. General betting and Gaming duties are the most popular taxes according to the new survey.
Emma Boon Campaign Director for the TaxPayers’ Alliance responded last night, saying: Air Passenger Duty has now joined the ranks of the most hated stealth taxes. Families who want to go away and have saved up for a well-earned break are now paying prohibitively high amounts to fly from UK airports.”
LEAST POPULAR STEALTH STEALTH TAXES:
ï‚· Number 1, Fuel duty: The survey found that just 14 per cent of respondents supported fuel duty. According to Office for Budget Responsibility the Government will collect £26.9bn from the tax this year, rising to £28.5bn in the next financial year – an increase of 6 per cent, year-on-year.
ï‚· Number 2, VAT: Just 18 per cent of respondents support Value Added Tax (VAT) – following the Government’s decision to increase the level from 17.5 per cent to 20 per cent last year. Despite this the Government expects just a 3 per cent increase in revenue from the tax, rising to £103.5bn next year (up from £100.3bn in the 2011/12 financial year).
ï‚· Number 3 (joint 3rd) Air Passenger Duty: A new entry into the ‘least popular’ list, Air Passenger Duty (APD) has historically been a little-known tax. However, since 2007, the UK’s APD for short-haul routes has increased by 140% to EU countries, and for long-haul routes by up to 325% so that the UK now has the highest passenger aviation tax anywhere in the world. According to today’s ComRes survey, just 24 per cent of people said they supported APD. Currently, a typical British family of four travelling in economy class pays £240 more than most European countries to fly to the USA and almost £50 more to fly to Europe. According to an analysis of Office for Budget Responsibility data, the Government expects the tax take from APD to increase by 12 per cent next year and by 44 per cent by 2015. Next week the Chancellor is expected to announce a double-inflation rise in APD. APD is the joint number 3 - with the Climate Change Levy, according the poll.
The most popular stealth taxes?
Gaming duty, tobacco duty and alcohol duty are the stealth taxes that enjoy the most public support according to the survey of over 2000 people. More than two thirds (68 per cent) of people say they back general betting and gaming duty with 65 per cent saying they back tobacco duty. These were the only two taxes that more than half of people said they supported. Alcohol tax also scored well with 43 per cent of people saying they supported it.
Emma Boon, Campaign Director of the TaxPayers’ Alliance, said: “It is hardly surprising that Air Passenger Duty has now joined the ranks of the least popular stealth taxes. Families who want to go away and have saved up for a well-earned break are now paying prohibitively high amounts to fly from UK airports, the highest passenger aviation tax anywhere in the world. The Government should work to cut APD so that we have a more competitive rate and taxpayers get a better deal.”
Stealth taxes and general tax-take - background: The phrase ‘stealth tax’ was first used during the 1992 election campaign by Conservative Chris Patten. Figures from The Institute for Fiscal Studies show that the Thatcher government was the heaviest taxer in the last 30 years, with total tax rate of GDP hitting 46 per cent at its highest. The average tax take, as a % of GDP, between 1979 to 1997 was 40.8 per cent. New Labour’s highest rate in its 11 years of government had been 39.4 per cent. The UK’s current tax burden as a proportion of GDP is 38.9 per cent.
Why is Air Passenger Duty suddenly so unpopular?
ï‚· Since 2007, APD for short-haul routes has increased by 140% to EU countries, and for long-haul routes by up to 325%.
ï‚· The UK’s top - or ‘Standard’ rate - is some 8.5 times the average of other countries in Europe which still levy a charge.
ï‚· The overall APD tax take is due to increase significantly if the Chancellor implements his ‘double inflation’ APD increase for April 2012.
ï‚· Currently, a typical British family of four travelling in economy class pays £240 more than most European countries to fly to the USA and almost £50 more to fly to Europe.
ï‚· The overall, or ‘quantum’, tax take is also due to increase when the UK enters the EU Emissions Trading Scheme (ETS) in 2012. Many EU countries are phasing out their versions of air passenger duty to compensate for the revenue to be raised by the EU ETS.
ï‚· More than 17,000 people have already written to their MP calling on the Government to scraps its plans for a double-inflation rise in APD.
ï‚· A recent ComRes poll found that 75% of MPs believe that ‘further rises in aviation taxation may price some people out of flying’.
ï‚· In September 2011, 20 cross-party MPs and peers wrote to the Chancellor urging him to re-think his plans.
ï‚· By the Department for Transport’s own figures, aviation taxes exceed the sector’s environmental costs by over half a billion pounds every year.
ï‚· Many European countries including Belgium, Holland and Denmark have abandoned their aviation taxes, due to the negative effects on their economies. In the longer-term, analysis shows that the UK economy will forego £750m of wealth and 18,000 jobs due to the recent rises in APD (November 2010), with around half the extra revenue raised offset by tax revenue losses in the wider economy (source Oxera, 2009)
Methodology: ComRes surveyed 2050 British adults online between 4th and 6th November 2011. Data were weighted to be demographically representative of all GB adults. ComRes is a member of the British Polling Council and abides by its rules.