A new tax on frequent flyers? Have you really thought this through?

It would be fair to say that I do a fair bit of travelling. I have, in the past, joked about having a carbon footprint the size of Wiltshire (an utter exaggeration, I admit) but I have, over the years, flown a lot more than most people do, and for a range of reasons. I pay, as a result, more than my share of Air Passenger Duty (APD). Do I begrudge that? Well yes, a bit. Do I accept that it is inevitable given my lifestyle? Yes, actually, although I would rather see a more nuanced APD that encourages airlines to fill flights or put on less of them. And so, the news that a group are proposing a tax on frequent flyers is of obvious interest to me.

In their letter to the Observer, they propose that anyone making more than one return flight a year should be taxed, by HMRC, using data supplied by the airlines and linked to their passport number. Further, the level of tax levied should increase as the number of flights does.

In fairness, they have considered some of the issues. However, there is a sense that it is a means of making rich people pay so one of their supporters feels it valid to say;

And the most popular destination of this small cohort of frequent flyers? Tax havens.

— Alice Bell (@alicebell) June 21, 2015

Now, pardon me, but I'm not aware that tax havens have scope for a lot of second home owners, and I certainly wasn't aware that France and Italy, which have large numbers of British second home owners, were tax havens. However, I'm not that sympathetic towards second home owners abroad. The model depends for the most part on cheap flights. But then, they do pay a lot of Air Passenger Duty now.

But there are a lot of people in this country, an increasing number, who have family and loved ones overseas. In our increasingly international world, it is not unusual to have a scattered family. And, in a Europe of open borders and freedom of movement, people have cause to travel home to visit. A Romanian working here to feed his or her family back home will use budget airlines to see them, and possibly visit as much as monthly. They aren't rich, their journey isn't for business, so under these proposals, we would tax them until they couldn't afford to go home at all.

Someone with an Indian family, like me, might make a trip to see them in February and then, in March, have to go home for a funeral. They would be taxed for attending a funeral, or a family wedding. And, the proposers admit that;

We’d like access to better data on this but from what we can see, although low-income migrant communities are more likely than others in their income bracket to fly, they are still unlikely to fall into the frequent flyer category that this tax reform will target.

In other words, they don't know, and possibly don't care that much. The cause is more important than the collateral damage.

The proposal would be intrusive too. 

First, HMRC would need access to data that is already captured by the Home Office, on passenger movements in and out of the country. This would have to be stored in an automated database that airlines could access in real time when selling tickets to customers. Second, airlines would need to start recording customers’ passport numbers at the point of ticket sale - instead of before boarding as is currently the case.

And, as for the impact on those businesses trading overseas;

The best option is probably to charge the levy to companies for their employees’ business flights rather than the individuals flying, with each company having a tax-free flight allowance based on company size.

As if that is a reliable yardstick. But again;

We would like to commission further work to look at the market impacts of this proposal in more detail, both for the aviation sector itself and for other sectors that are currently heavily reliant on air travel.

So, in other words, this is an intrusive, untested, ill thought out proposal which is likely to punish those with families overseas and businesses, without necessarily raising as much money as Air Passenger Duty does, some of whose supporters appear motivated almost more by a dislike of wealthier people than a practical sense of designing something that would work.

My advice? Go away and think again. And please skip the arguments that wealthy people need to be punished...