How Much Tax and Duty did you Say?!!!!

Beware the Treasury's Hidden Shocks in Invoices

Those of us in the UK who actually do pay taxes are all too familiar with those regular, often dreaded, brown envelopes that tell us how much PAYE or annual taxes that we have paid or are expected to pay.  These helpful documents tell us to our faces what the government of the day is taking from our income, however earned………Householders and tenants also feel the additional cut-purse activity of local councils.  We are then left to save or spend what economists and Treasury officials are pleased to call “Disposable Income” – that is that part of your income which they have not already disposed of!!!

Well that the price of living in a democracy – somebody has to pay for it!  

Now you would think that the Treasury and the Chancellor would be happy to leave it at that but NO! There are those additional taxes and fees we have to pay which I would like to call “guerrilla taxes” as they are generally hidden and strike when you are least expecting them. These then erode your “disposable income”.  There are several examples of these very effective additional revenue collectors,  two of which have ambushed me recently.  Air Passenger Duty and VAT.  Both of these were raised in the last budget.

In the case of APD the actual cost is hidden deep in the total price of the ticket.   Many people especially overseas visitors are unaware of it’s existence let alone how much it costs.  At least with  VAT it is always broken out in the final bill. However most people just reach for their wallet or purse and pay.  

I chose these examples not just because I blog on travel issues, but because of the fact that I was ambushed by both recently.  Also, my attention was drawn to how regressive APD is and what a sneaky tax VAT is – in its way just as regressive as APD at its current levels.  We are at the point where APD is already deterring those least able to pay the duty from flying.  Even worse in my view it is denying them choices of holiday destinations though cost.  Something last seen in the early 1950s days of civil flying.

In brief then……Using air miles to “buy” two Premium Economy tickets to Barbados, I was then told to actually pay £812 for APD and other fees.  Then – entirely my decision I admit, I had to pay a further £120 to secure the seats we wanted together. That’s an eye-watering £932 on top of the air-miles cost of the two seats.  Without the latter it is an open question as to whether I could afford the trip……..

The other ambush occurred when I had to reserve a hotel room for an overseas colleague who is  speaking at a London travel conference.    We all know from the media how expensive hotels are in London, especially with the Olympics approaching.  However, unfortunately I did not have the luxury of using an online hotels  price search site as the colleague was tied to using the hotel next to the conference halls where he is speaking.  First thing that happened was that I got an ex-VAT price which he approved and went back to the hotel the next morning to book it.  The offer was no longer there and the price had shot up by over £50 overnight (because of demand I was told).  That meant that at 20% VAT, just under £60 was hi-jacked by the Treasury for just one night’s stay in London when I booked the room.  A tip though!  I checked another site which came up on Google on the same page as the Hotel’s own booking site.  It headlined under the Hotel’s name and I was able to book for the same hotel at £20 less for the night.  The bill was still over £350 though inc. VAT!!  –    It is no wonder that the UK hospitality industry has been lobbying (in vain) for a reduction on hotel VAT. 

Let’s hope if inbound visitors do come for the Olympics by air they are aware of the APD and Hotel VAT costs involved in a UK visit,  otherwise they may have to resort to takeaways whilst here – Oh Lord I should have said cold pasties!   Warm ones now being subject to VAT I believe!