A tax on U.K. air passengers was attacked by tour operators on Monday who said they planned a legal challenge which could force the government to repay holidaymakers and airlines more than 2 billion pounds ($3.9 billion).
Britain’s Federation of Tour Operators (FTO) said it would challenge the legality of Air Passenger Duty (APD), adding if its high court bid is successful the British government would be forced to scrap the tax.
British Chancellor Gordon Brown doubled the duty -- first imposed in 1994 -- in December’s Pre-Budget Report, taking the levy on short-haul flights to 10 pounds from Feb. 1 and on long-haul to 40 pounds.
The FTO claims that under international laws included in European legislation in 2004 -- since when the duty has raised over 2 billion pounds -- the government is not entitled to impose charges on aircraft solely for the right of transit over, or flying in or out of Britain from another country.
“Charges are only permitted if they are cost-based in relation to the provision of a service, such as use of airports or air navigation services,” the FTO said in a statement.
“APD is not levied for any such service and is simply a tax which raises revenue for general government spending ... As a result APD is in contravention of Article 15 of the Chicago Convention, has been illegal under EC law at least since 2004 and should be withdrawn with immediate effect.”
Unlike airlines, tour operators, in most cases cannot pass the rise on to holiday makers who booked their trip before February.
The FTO claims the new tax rules breach the human rights of operators by not allowing them pass on the higher charges to holiday makers who booked early.
“The government is confident that APD is entirely legal and will robustly defend any challenge in the courts,” a Treasury spokesman said.
Treasury minister John Healey has already defended the legality of the hike after being quizzed in parliament.
FTO’s Andrew Cooper told Reuters that it had only discovered the issues when it was looking into the government’s decision to impose the new hikes.
Budget airlines have also attacked the rise in duty as a ploy to cash in on the rapidly growing market for no-frills flights.
