THE FOUR GREAT HOLIDAY RIP-OFFS
Families hammered by stealth tax rises, currency con tricks, hidden car hire extras and credit card swindles
FAMILIES are being hammered with a £250 holiday tax – plus a triple whammy of stealth fees. Air passenger duty, VAT and insurance tax have together soared by up to 40 per cent since 2008.
A family of four heading to Florida will now hand the taxman £253 even before boarding their plane. Hidden car hire extras, currency scams and exorbitant credit card fees add to the pain.
UK holidaymakers are expected to pay £2.4billion in tax this year. Eight years ago – before the Treasury imposed the hikes – the figure was just £900million. MPs last night called on ministers to slash the punitive taxes ‘prohibiting families from seeing the world’. But holidaymakers are also being clobbered because: More than 30 travel operators levy fees of 2 to 3 per cent on credit cards; Car hire companies impose stealth charges for insurance, satnav and other ‘extras’ that can double bills; Foreign retailers encourage payment in sterling, which attracts much higher transaction fees.
The investigation into tax rises was carried out by the Tax Payers’ Alliance.
‘Families work hard and save every year so they can enjoy a week away in the sun,’ said chief executive Jonathan Isaby.
‘So hard-pressed taxpayers have every right to be angry that the taxman chases
all the way to the departure gate to squeeze that bit extra from their budgets.’
The campaign group used figures from the Office for National Statistics and the Treasury to analyse the cost of going abroad.
It covered the VAT charged at 20 per cent on holiday essentials such as sun cream. VAT had been 15 per cent before being jacked by Labour and then Tory ex-chancellor George Osborne. Mr Osborne also increased the levy on insurance premiums from 17.5 per cent to 20 per cent.
Holidaymakers are also being hammered by air passenger duty which, since 2008, increases with the distance travelled.
However even taking a family of four only as far as Spain means handing the taxman £133.20 – 30 per cent up on 2008.
First Minister Nicola Sturgeon is set to slash air passenger duty (APD) by 50 per cent between 2018 and 2021 in a bid to boost tourism, investment and business activity.
English airports fear the reduction will make Scottish airports a much more attractive option for travellers from South of the Border. While the SNP backs the move, it is opposed by other parties in Scotland.
However, the move has also been criticised by green groups who say that climate change emissions would rise by 60,000 tons a year because of an increase in the number of flights leaving Scotland.
Tory MPs are privately putting pressure on Philip Hammond, the new Chancellor, to cut VAT in the autumn statement to provide a post-referendum shot-in-the arm to the economy. Last night, they went public with calls for air passenger duty to be cut. Andrew Bridgen, who has led the campaign to scrap the duty, said: ‘It’s important people have the opportunity to enjoy a family holiday.
‘The high levels of tax families have to pay for on top of their flights are unfair, especially when contrasted to the low levels of tax enjoyed by families across Europe.’
Tim Alderslade, of airline trade body the British Air Transport Association, said: ‘APD is a departure tax on the British traveller. It is the highest of its kind in Europe and the Treasury should be upfront about why it is prepared to see families in this country pay substantially more to take a break than their counterparts in places like France.
‘Flight taxes of this kind – in the postBrexit world – should be seen as an anomaly and the Government should follow the lead of the Scottish Government and announce a major reduction sooner rather than later.’
Mary Glindon, Labour MP for North Tynethem side, is one of 21 MPs to sign a parliamentary motion calling for air passenger duty to be cut. She has warned that many of her constituents will be tempted to fly from Scottish airports when the air tax is cut north of the Border.
She said: ‘This tax is prohibiting families from seeing the world. It’s a disgrace. The Government is exploiting holidaymakers and penalising people who want to travel.’
Air passenger duty is a lucrative source of income, raising more than £3 billion a year. The Treasury will also collect £3.1billion from insurance premium tax this year and an estimated £5billion in 2020.
James Daley, of the consumer website Fairer Finance, said: ‘Holidaymakers are really being attacked from all sides with rip-off charges from companies and high taxes.’
Government insiders say no decisions will be taken on tax cuts or other spending decisions until later this year, when the impact of the referendum on the economy is clear.
A Treasury spokesman said: ‘Air passenger duty has been frozen for most passengers since 2012. Alongside this, children under 16 are now exempt from paying APD and the cost of flying to many long-haul destinations has been cut.
‘This means that a family of four will save up to £242 on the price of their tickets.’
Britons going abroad are also reeling from the fall in the value of the pound against the euro and the dollar in the wake of the Brexit vote on June 23.