'Delivering Scotland's Air Departure Tax': consultation analysis report

5. Analysis Part C – Operational and future policy considerations

Part C of the consultation document focused on general comments and concerns regarding the operational framework currently in place for ADT and requested views on the future policy direction of ADT.

Question C1: Do you have any comments or suggestions regarding the legislative and operational framework currently in place for ADT? Do you foresee any potential challenges under the current framework?

31 respondents answered Question C1. Five respondents wrote that they had no comments or suggestions regarding ADT’s current operational framework.

Responses that discussed future rates will not be set out due to being out of scope of Question C1. Suggestions and recommendations for future ADT rates and policy will be included in the analysis of Question C2. In addition, any comments or suggestions in relation to the administration of the Highlands and Islands exemption have already been set out in Question A7 and are not considered in detail here.

Administrative Complexity and System Concerns

Multiple responses highlighted concerns with the change from monthly to quarterly returns and new tax codes for ADT due to the accompanying system changes required by taxpayers. Respondents also noted that manual adjustment of systems may be required due to implementation timeline constraints.

It was repeatedly highlighted by respondents that the implementation deadline of April 2027 compounds any administrative concerns due to additional time pressure.

“Whatever changes are potentially made, will result in a number of technical adjustments to airline systems and appropriate technology. This all takes considerable time and expense. It is therefore the view of the SPAA that simplicity is key, we are already talking about creating new coding for Scottish ADT and any additional changes could be even more confusing and costly.” - Scottish Passenger Agents’ Association

Multiple respondents also expressed their concerns around tickets already being sold for flights that will be subject to ADT. Respondents noted that airlines are currently selling tickets using APD codes and rates which may require airlines to absorb the cost of any additional tax should ADT diverge after April 2028.

One respondent also queried the tax treatment of connecting flights.

Engagement

Some respondents expressed discontent at the lack of engagement prior to the announcement of the implementation timeline for ADT in the 2026-27 Scottish Budget. Respondents note that this was unexpected, was accompanied by little administrative or policy clarity, and may have destabilised Scottish aviation competitiveness.

“Creating such doubt - during a critical planning window - amounts to avoidable harm with no corresponding benefit, undermining confidence in Scotland as a stable and predictable aviation market.” - Edinburgh Airport

Possible Mitigations

Respondents provided several possible options to address their administrative concerns around the implementation of ADT.

Alignment with APD Framework

Many respondents suggested that a simple administrative system alongside sufficient guidance would enable a smooth transition to ADT. Several respondents specifically requested that the ADT administrative system be aligned with APD to reduce operational and system challenges for taxpayers.

One respondent also explained that alignment with UK rates would help mitigate challenges to airline staff by providing certainty to the industry.

Engagement

Many respondents emphasised the importance of continuous communication between the Scottish Government and the aviation industry, as this helps to improve administrative clarity, ensure a smooth transition and minimise compliance risks.

“Clear and early communication is essential to avoid confusion between the APD and ADT regimes and to ensure airlines, agents, and booking systems have sufficient time to update pricing and tax applications.” - ABTA

Some respondents also noted their appreciation of the Scottish Government’s continued engagement with stakeholders following the 2026 Scottish Budget.

Implementation Timeline

Many respondents requested that the implementation of ADT be delayed, with the majority suggesting implementation should take place in April 2028. One respondent noted that, even with the Scottish Government’s commitment to match APD rates and bands for the first year of implementation, a delay would mitigate any financial and administrative burdens due to tickets already being sold for flights departing on or after 1 April 2027.

Other respondents suggested a phased introduction to allow taxpayers more time to update their systems. However, one respondent noted that a phased implementation timeline may result in taxpayers having to update their systems multiple times, resulting in increased administrative challenges and costs.

Limited Concerns

Many respondents indicated that they have no major concerns and the challenges mentioned above are not insurmountable barriers to implementing ADT in April 2027.

“Taken together, these considerations do not present barriers, but they underline the value of early clarity, predictable timelines, and eventually a stable long-term structure.” - IATA

Scottish Government Response

The Scottish Government recognises the importance of working in partnership with the aviation sector to introduce ADT from 1 April 2027 and ensure the tax is administered effectively and efficiently.

The Scottish Government and Revenue Scotland have engaged with IATA on the establishment of an ADT code for IATA’s List of Ticket and Airport Taxes and Fees (ILTATF). ILTATF is a comprehensive directory and quick reference tool used by air carriers for airline passenger taxes, charges and fees across the world. It is designed to meet the requirements of collection, filling, ticketing, remitting and interlining.

Revenue Scotland is carrying out engagement with a range of industry stakeholders in order to understand the systems and processes currently in place for APD and equivalent international taxes. This work is intended to ensure that the administration of ADT is as efficient as possible. Revenue Scotland has engaged with a number of scheduled operators, business jet operators, service providers and trade bodies.

The Scottish Government recognises that some respondents noted they would have preferred advance notice of the announcement at the 2026-27 Scottish Budget that ADT will come in to effect from 1 April 2027. However, elements of the Scottish Budget, including tax policy decisions, are often market sensitive and such decisions must be announced in the Scottish Parliament in the first instance.

Question C2: What are your views on the future role for ADT policy in Scotland and the associated economic, environmental and social impacts?

41 respondents answered Question C2. Themes that have been set out in previous responses or are only mentioned by singular respondents will not be set out in detail. This includes responses on the future role of the Private Jet Supplement as this has been set out in Questions B4 and B5.

Rates

Many respondents offered suggestions around future rates of ADT. Some respondents also conveyed concerns that the Scottish Government has not indicated what ADT rates will be beyond April 2028.

Abolishment of ADT

Some respondents expressed the view that ADT should simply be abolished, either immediately or in the future, with one respondent writing that removal of the tax would generate more income for airports.

“In the short term we encourage the Scottish Government to reduce ADT below the level of APD in the UK for all routes captured by ADT. In the medium term the government should look to abolish the tax completely.” – Loganair

Rate Cuts

Several respondents queried why the Scottish Government was no longer committed to the 50% rate cut previously announced in 2016 and requested that the 50% cut should once again be the Scottish Government’s policy.

“Looking beyond 2027/2028, ABTA urges the Scottish Government to reduce ADT in line with its initial commitment to reduce the rate by 50%, which ABTA supported, as it drives inward investment, enhances connectivity, and tourism.” - ABTA

Conflicting views were submitted by the aviation sector regarding targeted rate cuts to specific bands within ADT. While respondents agreed that a targeted rate cut could support growth in the specified band, opinions varied on which band this should be.

Those in favour of a cut to short-haul rates cited their value to domestic connectivity and that domestic and short-haul routes are most used by lower-income passengers. One response also suggested that the Scottish Government should use ADT to reverse the increase for short-haul flights recently introduced for APD by the UK Government.

Respondents in favour of cuts to long-haul routes emphasised the economic value that international passengers bring to Scotland and the importance of expanding Scotland’s wider connectivity.

Some respondents also noted that avoiding an annual inflation rate increase could stimulate Scotland’s competitiveness in the wider aviation sector.

Divergence from APD

Several respondents emphasised that aviation taxes in the UK are the highest aviation tax globally and matching these for ADT puts Scotland at a competitive disadvantage. These respondents argued that Scotland’s ADT rates should not be raised above current APD rates to avoid detrimental impact on Scotland’s aviation connectivity.

“From 2028-29 onwards, it would be incredibly damaging to the competitiveness of Scotland if it chooses to diverge from the UK tax regime and instead introduce a higher aviation charge, disincentivising airlines to develop direct flight routes via Scottish airports and putting at jeopardy existing connectivity.” - Scottish Tourism Association

Rate Increase

Conversely, many respondents (particularly eNGOs and some individuals) stated that ADT rates should be raised to cut emissions by reducing the number of flights arriving and departing from Scottish Airports. These respondents emphasised that ADT should foremost support Scotland’s net zero ambitions.

One respondent wrote that ADT should be designed to encourage the modal shift from high-polluting aviation to public ground transportation options, such as rail.

“Price signals are a key mechanism for doing this, and therefore bringing price parity, or cost savings, for rail compared to air, for key routes such as Edinburgh/Glasgow => London should be a key objective of government policy.” - UKInbound

Oxfam Scotland also suggested further exploration of increased charges or bans on short-haul routes where feasible alternative transport options exist.

Hypothecation

Many respondents expressed the view that ADT revenue should be ringfenced for sustainable development. Suggestions included investment in SAFs, hydrogen and electric aviation technology and further development of Scotland’s rail network.

Balance and Proportionality

Multiple respondents expressed the view that ADT is ineffective as a ‘green’ tax and will only have limited contributions to Scotland’s net-zero and environmental objectives. Respondents noted that taxation is an inefficient method to stimulate emission reductions as emissions will simply be displaced from Scotland.

Respondents emphasised the need to understand trade-offs when designing ADT and that the final policy should balance environmental, economic and connectivity goals.

“While environmental considerations are an important factor, ADT policy should be realistic about the limits of what taxation alone can achieve in driving behavioural or technological change in aviation. Trade-offs between revenue, connectivity, competitiveness, and environmental objectives should be made transparently, with proportionality and evidence at the forefront.” - Individual

Suggested Adjustments to ADT Framework

Banding

Multiple responses requested a re-examination of the current ADT bands to better capture the relationship between increased emissions and distance.

“Increase the ADT rates for flight distances that correspond to flights outside the EU, and won’t be covered by the UK ETS. These are currently covered by the ICAO CORSIA scheme which doesn’t price most aviation emissions and applies very low carbon prices vs. the ETS.” - Safe Landing

Two respondents also noted the value in retaining a distinct domestic band due to the relatively higher price sensitivity on these routes.

Premium Economy

Some respondents expressed the view that Premium Economy should be treated the same as Economy Class rather than Business or First Class. Respondents noted that Premium Economy is more closely aligned to the Economy Class experience and is not viewed as a luxury product by passengers or the aviation industry.

In addition, some respondents highlighted that children are not exempt from ADT in any other class than economy (although children under the age of two who are not allocated a separate seat are non-chargeable passengers, regardless of class of travel). It was suggested that children should be exempted from Premium Economy to avoid disproportionately impacting families who wish to travel in a class other than Economy.

Tax Holidays

Some respondents from the aviation industry raised the possibility of the introduction of tax holidays for new routes to encourage the expansion of the Scottish network.

“Seasonal rates or tax holidays for new routes could also encourage airlines to take more risk, particularly on services that support tourism or regional development. A tax holiday works because the revenue was never collected in the first place, so there is no loss to the public finances, but it can unlock new connectivity.” - Loganair

However, another respondent noted that tax holidays for new routes may cause competition issues between airports and airlines with routes to and from the same airport.

Seasonal Rates

Two respondents suggested that seasonal rates could be effective at encouraging growth in the tourism and aviation sectors. Specifically, it was noted that ADT rates could be lower during off-peak periods during winter months to improve demand.

Multi-Year Rate Setting

One respondent proposed that setting ADT rates multiple years in advance would contribute to stability of the aviation industry and allow for long-term strategic decisions to be made by airports and airlines.

Other

International Examples

Several respondents brought up international examples of countries who have seen growth in the aviation sector after cutting or abolishing aviation tax rates, such as Sweden and Germany. Respondents also cited examples of countries who increased tax rates and experienced drops in passenger demand and revenue.

Frequent Flyer Levy

Multiple eNGOs suggested that ADT should evolve into a Frequent Flyer Levy. This proposal is not set out in detail here as it is addressed in relation to question B5 above. As set out in the Scottish Government’s response to question B5, the proposal for a frequent flyer levy is out-with devolved competence and is not a matter which the Scottish Government currently has the power to take forwards.

ETS

Some respondents queried how ADT will interact with the Emissions Trading System.

Scottish Government Response

The Scottish Government acknowledges that some respondents would like ADT rates for the 2028-29 financial year to be set out earlier than the 2027-28 Scottish Budget. However, the Scottish Government will proceed with announcing ADT rates for 2028-29 as part of the 2027-28 Scottish Budget, which is more than a year in advance of rates taking effect. This is in line with the International Civil Aviation Organization’s recommendation that governments should allow a minimum of four months for prenotification of tax changes, as well as the approach taken by the UK Government to APD. This is intended to provide Scotland’s aviation sector with as much certainty as possible prior to tickets being advertised and sold to passengers.

Replacing APD with ADT in Scotland necessitates an annual reduction to the Scottish Government's block grant. This block grant adjustment (BGA) will be required every year following the implementation of ADT and the scale of future BGAs for ADT will be linked to future UK Government policy decisions on APD. It would therefore be impractical for the Scottish Government to announce ADT rates for 2028-29 until we have assessed the impact of UK Government’s APD policy decisions for 2028-29 on the BGA position. APD rates for 2028-29 are expected to be announced at the next UK Autumn Budget.

Currently, the UK Government announces APD rates at the UK Autumn Budget, approximately eighteen months in advance of rates taking effect. In a scenario where the Scottish Budget follows the UK Autumn Budget by approximately six to eight weeks, the Scottish Government would be able to announce ADT rates approximately sixteen months prior to rates taking effect. This exceeds the typical notification periods provided by many other European nations on changes to passenger tax rates.

The Scottish Government notes the various views raised by respondents on the future rates and bands of ADT. As noted, the Scottish Government has committed to matching the rates and bands of APD for the first year (2027-28) of ADT’s operation to provide tax cost certainty. Future policy decisions will be informed by evidenced advice and announced at the annual Scottish Budgets, at least one year prior to coming into effect.

The Scottish Government acknowledges that some respondents called on the Scottish Government to return to a policy of reducing rates by 50% (relative to UK APD rates). However, this policy has previously been ruled out by the Scottish Government on the grounds that it would be incompatible with Scotland’s net zero ambitions.

The Scottish Government is committed to working with airlines and Scotland's airports to help grow our international connectivity, while not returning to previous levels of emissions. Scotland’s International Strategy, published in January 2024, reaffirms our commitment to grow international connectivity. Our key aspiration is to help Scotland become at least as well connected as our peer nations and regions by growing demand for existing and new routes that are vital for inbound tourism, business connectivity and exports. Transport Scotland leads on this aim, working with VisitScotland, to provide route development support to airlines. This can entail cooperative marketing packages, market intelligence and data on the potential of the Scottish market.

The UK’s Emissions Trading Scheme (ETS), which replaced membership of the EU ETS, covers participants from the aviation, power and industrial sectors. It sets a total annual cap on greenhouse gases emitted by these sectors to ensure that polluters pay for their emissions. It covers domestic flights within the UK and flights from the UK to the EEA. The UK ETS Authority held a consultation on the application of the UK ETS to regional aviation services from 28 October to 19 December 2025. Their response to this consultation is yet to be published at the time of writing.