Jet fuel tax could raise £6bn a year in the UK, says thinktank

Campaigners have urged the chancellor to start taxing jet fuel – with a report showing that charging duty at the same rate paid by motorists would raise up to GBP6b a year for the public finances. An analysis by the thinktank Transport & Environment (T&E) UK said introducing a “fair” equivalent to the fuel duty paid in other sectors could raise between GBP400m and GBP5.9b a year, based on the 11m tonnes of kerosene consumed by planes taking off from the UK in 2023. T&E UK said the current system meant a teacher driving to school would pay more fuel duty than a private jet owner would to fly away on holiday. Airlines pay no tax on fuel, although other taxes on flights, including air passenger duty, are levied in the UK. The report said it was a “common myth” that aviation fuel could not be taxed, with the UK having the right to tax domestic flights and, post-Brexit, flights to the EU. These account for 80% of departures. Securing the full revenues would require an “anti-tankering” law to ensure airlines bought 90% of the fuel for outbounds flight in the UK. Fuel duty on diesel or petrol at the pumps is levied at 52.95p a litre, and many expect Labour to raise the level by scrapping the 5p cut made by the Conservatives in 2022. A lower rate of 11p is paid by farmers and rail operators for red diesel.<br/>