Jul 2008 25

Download the full report (PDF).

New research from the TaxPayers’ Alliance reveals the true cost of taxes on holidays abroad. With hard-working people saving all year round for a well-deserved break, few of us are aware of just how much of our holiday money goes straight into the Treasury’s coffers.

Most simple but important purchases made inside Britain before going on a holiday, such as clothes for adults or hair cuts for all the family, are subject to VAT, while travel insurance purchases are hit by Insurance Premium Tax and budget flights by Air Passenger Duty. As the summer holiday season draws near, new calculations by the TaxPayers’ Alliance reveal just how heavy a burden the taxman places on rest and relaxation. Click here for the full report (PDF).

Key findings:

  • The total tax bill on Britons holidaying abroad is almost £1.5 billion, or over £30 for each of the 45 million holidays abroad taken by British residents each year (based on a representative basket of goods typically purchased). This is equivalent to the cost of a return flight to Europe for every holidaymaker.
  • A family of four travelling to Florida this summer will face an average tax bill of over £200 on their flights and holiday purchases. That is equivalent to the cost of having to take an extra child along.

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:

“The credit crunch and soaring food and fuel costs are making it harder than ever for people to afford a well-deserved summer holiday abroad. Instead of hiking taxes on flying, Gordon Brown and Alistair Darling should give us all a tax break.”

Tax charged on some examples of holiday essentials:

  • Economy flight to Florida: £40.00
  • Budget flight to Malaga: £10.00
  • Budget family travel insurance: £4.23
  • £20 bottle of aftershave/perfume: £2.98
  • Hair cut: £2.23
  • Summer dress from Primark: £1.79

These are only some examples of the holiday purchases used in our calculations – for a complete list please see the full report (PDF).

  • Richard Garland

    “Insurance Premium Tax ” has to be the biggest fraud.
    We should be encouraging people to tak insurance – yet they are stung by this.
    My medical insurance helps aleviate some work from the NHS – yet I pay a tax for this.
    How in a fair and just world is this right?

  • Hardeep_Singh

    The Air Passenger Duty (APD) is a nasty tax on an industry that is leagues ahead in terms of professionalism than any public or government sector. However New Labour wish to extract as much out of the profitable airlines as possible what a shame. The airline industry is as I’ve no doubt mentioned in the past an economic multiplier yet thanks to this regime they have been held up as the whipping boys whilst they have the audacity to demand revenues from them too! The APD is not an insignificant amount and the proceeds of this tax revenue are as always very ambigous and cloudy in their eventual goal. No wonder the government is anxious to have a single price for selling tickets where their respective ‘cut’ can be conveniently removed from scrutiny. APD is nearing 50% of a ticket price, what a rip off to say the least.
    Poorer families really get hit by these ridiculous taxes and charges with some of them unable to really afford such expense.

  • Elizabeth R Macpherson

    Pros.experts agencies quangoes bureaucracy full of incompetence overpaid,services,NHS alike of management overseeing unproductive never needed before ie mops sent out to contractor to be cleaned patients dying from bugs.littered streets and countryside.Foreigners benefited housed before our own people unbelievable,
    Righting against whom numerous laws passed by incompetants elected by us our views values ignored who helped put the Great in Briton joining the millionaires row at our expence no one seems able to stop their greed none honourable