New £200 ‘UK Global Tax’ on flights to destinations over 5,500 miles from the UK

Thursday, April 21, 2022 5:02 PM

Flights to Singapore would be subject to the tax

The Government’s plans for a new so-called ‘British Global Tax’ will make it harder and more expensive for UK businesses and investors to build important new relationships with markets outside of Europe, with up to £200 additional taxes on the cost of flights, business leaders warned today.

In fact, according to an analysis by the Global Britain Commission, shared with AM City this afternoon.

This represents a bill increase of £44million over the current air passenger rights regime.

The destinations include a range of potential key trading partners for the post-Brexit UK, including heavyweights such as Australia, New Zealand, Japan, South Korea and Argentina.

Additionally, several of the world’s fastest growing emerging economies will also be affected, including the Philippines, Malaysia and Vietnam, the group warned.

The countries caught up by the new tax

Country Distance from UK (miles) Passengers to the country (2019) Growth Rate Forecast, 2022-2025 (%) Annual ‘British Global Tax’ (£m) Does he have a trade agreement with the UK? CPTPP Members
Singapore 6739 1623243 2.7 4.1 Yes Yes
South Africa 5600 1438785 1.5 3.7 Yes
Mexico 5546 1132721 2.4 2.9 Yes Yes
Thailand 5918 904351 3.8 2.3
Japan 5937 775204 1.3 2.0 Yes Yes
South Korea 5500 528363 2.7 1.4 Yes
Malaysia 6546 493956 5.4 1.3 Yes
Argentina 6918 361259 2.0 0.9
Australia 10542 337996 2.9 0.9 Yes
Mauritius 6041 218343 4.2 0.6 Yes
Vietnam 5733 163342 6.9 0.4 Yes
Taiwan 6073 142910 2.5 0.4
Brunei 6993 127023 2.3 0.3 Yes
Philippines 6664 111217 6.6 0.3
Chile 7249 93407 2.2 0.2 Yes Yes
Peru 6317 43281 3.8 0.1 Yes Yes
Indonesia 7271 30871 5.7 0.08
New Zealand 11683 17895 2.3 0.05 Yes

Post-Brexit trade deals

Since Britain left the European Union more than two years ago, the government has begun to build new kinds of relationships with global partners, set out its vision for an independent foreign and defense policy, the so-called integrated review, as well as a new export strategy.

“By 2030, we will be deeply engaged in the Indo-Pacific as the European partner with the broadest and most integrated presence in support of mutually beneficial trade, security and shared values. “says the government’s integrated review.

Additionally, the export strategy states that “our strategy responds to and anticipates changes in the global economy, with a focus on the Indo-Pacific.”

Also, recently, Trade Secretary Anne-Marie Travelyan said: “I look forward to visiting Asia…and flying the flag of global Britain holding valuable trade talks with key partners. of the Indo-Pacific region and pushing to secure membership of the CPTPP by the end of the year.

She added: ‘This is just one aspect of our Indo-Pacific strategy, which will benefit businesses and consumers in all parts of the UK and help us grow at home.’

“A blow for Great Britain”

Although the government has said that the aim of the new tax is to “reduce carbon emissions from aviation”, it will do little to achieve this, rather the increased cost could completely prevent these routes to fly – routes to destinations that cannot be reached by other means, “dealing a blow to Global Britain”, the group said in today’s analysis.

“The answer is not this tax, but investing in sustainable fuels to reach these target locations while reducing emissions and achieving net zero goals,” they added.

Global Britain Commission Chairman Liam Fox MP, former Secretary of State for International Trade, said today that ‘advancing work on sustainable aviation fuel is a key part of how we can use the best technology on our road to decarbonization.

Fox warned that “we will not make the transition by punishing those who contribute to our prosperity through trade, but by making the best use of our innovation, creativity and ingenuity”.