Official HMRC figures show holidaymakers paid a record £4.6billion in Air Passenger Duty (APD) in the 2025-26 tax year, a rise of nearly £500million (12 per cent) on the previous year, after Labour increased the levy on flights. The increase, dubbed the "holiday tax," follows Chancellor Rachel Reeves's 15 per cent rise in APD introduced in her first Budget, which took effect this April and pushed tax bills for a family of four flying economy on some routes above £400 for the first time. The figures have prompted calls for new Chancellor John Healey to freeze APD in his Budget next month, amid warnings the levy is damaging Britain's competitiveness and cost of living.

In the first quarter of the current financial year (April to July 2026), APD receipts hit a record £1.6billion, £66million more than the same period last year, putting the Treasury on course for another record annual haul. Under the new rates, the charge for short-haul economy flights rose from £13 to £15, while premium economy on flights of up to 5,500 miles (such as to Dubai or Florida) rose to £244, meaning a family of four could pay nearly £1,000 in tax alone. Critics including Shadow Transport Secretary Richard Holden, IATA's Willie Walsh and ABTA's Mark Tanzer argue the UK now has the world's highest air travel taxes, warning of harm to tourism, investment and jobs.