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Evening Standard
Evening Standard
National
JIM ARMITAGE

Comment: Flybe's tax let-off shows system needs reform

The plane's landing gear broke as it landed in Amsterdam (Picture: REUTERS)

One of the many aspects of FlyBe’s government-funded aid package that stick in the craw is the deferral of more than £100 million of Air Passenger Duty.

Not only is it unfair that the sickly company is being allowed to hold on to our money instead of handing it over to the Treasury, but a lot of it wasn’t even accrued for Flybe services.

You see, many people use Flybe to get from the regions to London or Manchester, from where they fly long haul.

It's on that lengthier stretch that the biggest duty is levied. But the rules state that the duty for the whole trip - say, Newquay-London-New York - must be collected from the airline running the first leg – in this case, FlyBe.

That perhaps explains why Flybe's unpaid Air Passenger Duty is so high.

Given that FlyBe is likely to fail again in the not too distant future, jeopardising another huge slug of duty receipts for the Treasury, perhaps the government might want to change matters so the safer, better-run long haul airlines can be custodians of their chunk of the taxman's dues.

Something for the Chancellor to ponder as he tinkers with the duty in the Budget.

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