Member Article

What’s the highest rate of tax you pay?

VAT at 20%? PAYE of 32% (12% NICs, 20% income tax)? Maybe you are a higher rate taxpayer and so it’s 40% or even 45%, plus the 2% NICs if it’s employment income? Could it be as much as 55% because you have got the numbers wrong on some pensions savings?

Forget those rates of tax. If you are taking an international flight this year you could well see taxes and fees that are double the cost of the actual flight. Never mind that, as a holidaymaker, you are going to pay for the flight out of your post-tax and post-NICs income. As an international traveller you have the privilege of paying not only UK Air Passenger Duty (APD) to the UK Treasury but all and any levies that the world’s airports and tax systems choose to apply. On a flight that touches down en route, that can get expensive. Thank goodness that UK flight websites are compelled to show the inclusive cost of the flight to prospective flyers. I bet you didn’t realise that you were not only an international traveller but a multi-national taxpayer!

Oh, and in case you weren’t aware, if a class of travel provides for seating in excess of 40 inches, then the reduced rate APD no longer applies, and you’ll be charged at either the standard or higher APD rate – the ‘standard’ rate being twice as much as the reduced rate (and the higher rate being twice as much as the standard rate).

(Example: London Heathrow to Indira Gandhi International Airport, Delhi via Zurich with Swissair on 6/8/14, returning 13/8/14. Flight £149, taxes and fees £387.25, of which UK APT should be £85/£170 – Band C reduced/standard rate).

Lesley Fidler is employee benefits director at Baker Tilly

This was posted in Bdaily's Members' News section by Baker Tilly .