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Air Passenger Duty

Air Passenger Duty

The Smith Commission report, published on 27 November 2014, recommended, amongst other things, further devolution over elements of taxation and public spending to the Scottish Parliament.  Paragraph 86 of the report recommended that “the power to charge tax on air passengers leaving Scottish airports will be devolved to the Scottish Parliament. The Scottish Government will be free to make its own arrangements with regard to the design and collection of any replacement tax, including consideration of the environmental impact.”

This proposal, and others contained in that report, were taken forward in the Scotland Act 2016 which received Royal Assent on 23 March 2016.  Following the commencement of section 17 of that Act on 23 May 2016, the Scottish Parliament now has the power to legislate for a Air Departure Tax (ADT) which will replace Air Passenger Duty (APD) in Scotland.  Paragraph 26 of the agreement reached between the Scottish and UK Governments on the Scottish Government’s fiscal framework states that an APD replacement tax will come into effect in Scotland from April 2018.

The Scottish Government will use the devolution of ADT to the Scottish Parliament to design and structure a replacement tax which better supports our objective of boosting Scotland’s international connectivity and generating sustainable growth.  This could help to generate new direct routes, sustain existing routes and increase inbound tourism.  Internationalisation is one of the four priorities for sustainable growth which underpins Scotland’s Economic Strategy.     

The Air Departure Tax (Scotland) Bill was formally introduced before the Scottish Parliament on 19 December 2016. The Bill makes provision for ADT, a tax to be charged on the carriage of chargeable passengers on chargeable aircraft by air from airports in Scotland and can be accessed at: http://www.parliament.scot/parliamentarybusiness/Bills/102778.aspx

Programme for Government 2016-17 

The Programme for Government 2016-17 published on 6 September 2016 confirmed that:

  • the Scottish Government is committed to reducing the overall burden of the APD replacement tax in Scotland by 50% by the end of the current Parliamentary session (with the reduction beginning when the tax comes into effect from 1 April 2018), with a view to abolishing the tax when resources allow. 

Scottish Government APD stakeholder forum

The Scottish Government established an APD stakeholder forum on 6 August 2015 to help inform the development of policy and legislative proposals for an APD replacement tax in Scotland.  

Membership of the stakeholder forum is formed from a broad range of sectors including airlines, airports, travel organisations, business representatives, tax accountancy and legal professional bodies and environmental organisations.

Papers and notes of all forum meetings, as well as the current terms of reference, are available here.

Public Consultation

The Scottish Government published the following two public consultation papers on 14 March 2016:

Both consultations closed on Friday 3 June 2016, and the analysis and responses received can be found on the Scottish Government’s Citizen Space online consultation platform.