New Zealand and Australia-bound air passengers will be hit hard by the British government's economic stimulus package, with those taking long-haul flights to be slugged by a new departure tax system.
British finance minister Alistair Darling announced yesterday that Air Passenger Duty (APD) would become a four-tier system based on distance travelled.
Those flying furthest and having the biggest environmental impact will pay more, with travellers going to New Zealand and Australia forking out nearly $240 in passenger tax in two years' time.
The reforms were announced as part of the British government's £20 billion ($NZ56.3 billion) package to rescue the flagging economy.
Measures also included slashing Value Added Tax on goods and services by 2.5 percent to 15 percent.
Darling said while there was cross-party support last year for a reform of APD to a tax per plane in a bid to address carbon emissions, such a move could prove detrimental in the current economic climate.
"This proposal could harm the aviation industry at a time when it is facing huge problems," Darling said.
"So instead I have decided to reform APD into a four-band system ensuring those that travel further and have a larger environmental impact meet that cost.
"I believe this will be effective in reducing emissions from aviation." Delivering a key budget report, Darling forecast the economy would shrink in 2009 before recovering in 2010 and said the Labour government was acting now to allow the country to emerge stronger from the downturn.
Britain's economy is teetering on the brink of recession after shrinking in the third quarter of 2008, slammed by the global credit crunch, a slumping property market and chaos on world financial markets.
Travel Weekly reported the changes to APD would add £15 ($NZ41) in tax to a flight to New Zealand from next November and £45 ($NZ125) from November 2010.
APD is currently levied at £10 ($NZ27) on economy flights within Europe and £40 ($NZ111) beyond, with premium seats taxed at double those rates.
Under the changes, charges will be levied across four bands from November 2009.
Band A covers Europe, band B extends to destinations such as Egypt, Bahrain and the United States, band C takes in the Caribbean, and band D includes Australia and New Zealand.
Total APD on a band D flight will be £55 ($NZ152) from next November and £85 ($NZ236) a year later.
