Air Departure Tax Administration Regulations: business and regulatory impact assessment

Executive summary

This Business and Regulatory Impact Assessment (BRIA) follows on from the 'Delivering Scotland's Air Departure Tax' consultation which sought evidence and views from stakeholders on transition from Air Passenger Duty (APD) to Air Departure Tax (ADT) in Scotland on 1 April 2027.

This BRIA has been prepared to support the introduction of the Air Departure Tax (Administration) (Scotland) Amendment Regulations 2026 (“the Regulations” or the “Administration Regulations”). The Regulations amend the Air Departure Tax (Scotland) Act 2017 to make provision relating to the administration of the tax, including the registration and return process that Revenue Scotland will use to administer and collect ADT.

The provision within these Regulations will have a negligible effect on businesses and consumers. However, recognising that they form part of an overall suite of provisions that will be required to administer the tax, and that it has been several years since a BRIA was last produced for ADT, this BRIA also considers, in parts, certain broader impacts associated with the delivery of a new devolved tax.

The BRIA reflects the best available information at the time of publication, outlining existing evidence and potential impacts of administration regulations as set out in the consultation. This BRIA supports the associated secondary legislation to be laid in Parliament.

Objective

The purpose of the Regulations is to facilitate the effective introduction of ADT on 1 April 2027. The Regulations will enable Revenue Scotland to administer ADT effectively.

Sectors affected

The Administration Regulations will affect all airlines and other aircraft operators who carry chargeable passengers on flights from 1 April 2027 onwards on chargeable aircraft which begin at an airport in Scotland, insofar as they will be required to register for the new devolved tax.

Anticipated impacts

The Scottish Government estimates that there are currently approximately 50 registered commercial APD taxpayers in Scotland. Revenue Scotland does not yet have an accurate figure of occasional returners (such as private and business jet operators), but this is expected to be less than a third of the total number of commercial operators. As such, a relatively small number of airlines and other aircraft operators will be liable to register and pay ADT.

The Scottish Government would expect the administration costs involved in relation to ADT to be broadly similar to those for APD. Any costs are anticipated to be minimised by the similarities of the two tax regimes. Although the exact format of the ADT tax returns will be set out by Revenue Scotland in due course and may differ from that of APD, the Scottish Government expects that any tax return would draw on data that taxpayers have readily available and is already required to make APD tax returns.

Enforcement

Revenue Scotland's compliance and enforcement powers for ADT are broadly in line with those used to administer existing self-assessed devolved taxes, such as Land and Buildings Transaction Tax, Scottish Landfill Tax and Scottish Aggregates Tax.

The Scottish Tax Tribunals are in place to hear appeals against appealable decisions made by Revenue Scotland related to the fully devolved taxes.

Recommendations

The Scottish Government recommends the adoption of option 2, which is to introduce secondary legislation to make provision to enable the effective administration of APD by Revenue Scotland and retains the fundamental structure of APD.

We recommend this option on the basis that it will reduce the uncertainty for prospective taxpayers (airlines and other aircraft operators) and their customers (passengers) and will contribute towards making the transition between APD and ADT as smooth as possible for the businesses and stakeholders affected.

This option also reflects feedback from respondents to the ‘Delivering Scotland’s Air Departure Tax’ consultation as well as broader stakeholder engagement.