Air Departure Tax FAQs

Air Departure Tax FAQs

INTRODUCTION

 

1.01 What is Air Departure Tax?

Air Departure Tax (ADT) is a tax payable by aircraft operators on the carriage of chargeable passengers on chargeable aircraft departing airports in Scotland. The tax will replace UK Air Passenger Duty (UK APD) in Scotland from 1 April 2018.

1.02 Who is a chargeable passenger? 

Every person carried on a flight that begins in Scotland is a chargeable passenger, unless the person is working during the flight or qualifies for an exemption as a non-chargeable passenger. Some exemptions from the tax for certain passengers are set out in the Air Departure Tax (Scotland) Act 2017 including passengers not carried for reward, under the age of 16, carried on connected flights or passengers on NATO flights. Further exemptions may be set out in secondary legislation.

1.03 What is a chargeable aircraft?

ADT is only charged in respect of chargeable passengers carried on certain aircraft, referred to in the Act as chargeable aircraft. A chargeable aircraft is a fixed-wing aircraft, fuelled by kerosene, with a maximum take-off weight of 5.7 tonnes or more. Every aircraft that meets those criteria is a chargeable aircraft, unless the aircraft qualifies for an exemption as a non-chargeable aircraft. Some aircraft exemptions are set out in the Act, including aircraft used under public service obligation or for military, emergency, training or research flights. Further tax exemptions may be set out in secondary legislation.

1.04 Who is liable to ADT?

Aircraft operators are liable to ADT on the carriage of chargeable passengers on a chargeable aircraft for flights that begin in Scotland. Nothing in the Act prevents aircraft operators from passing the cost of the tax on to passengers (or requires them to do so).

1.05 What are the tax bands, tax rates and tax rate amounts?

The structure of ADT is similar to the structure of UK APD, in that the amount of tax incurred for the carriage of a chargeable passenger on a chargeable aircraft will depend on the passenger’s final destination and class of travel. The Act places a duty on the Scottish Ministers to define tax bands by reference to a passenger’s final destination and to set tax rate amounts according to the passenger’s class of travel. Details on tax bands and tax rate amounts will be delivered in autumn through secondary legislation.

1.06 How will the tax be collected and managed?

Revenue Scotland will be responsible for collecting and managing ADT and will build on the successful delivery of Land and Buildings Transaction Tax (LBTT) and Scottish Landfill Tax (SLfT). Continuing the digital approach, we will be promoting online registration, returns and electronic payments as the most efficient, convenient and secure way for taxpayers to fulfill their obligations. At present, over 99% of returns for LBTT and SLfT are made online.

1.07 How does ADT differ from UK Air Passenger Duty (APD)?

The Act provides for a tax that is broadly similar to UK APD. A key difference is that aircraft operators making regular ADT payments will be required to make returns quarterly rather than monthly. The biggest practical difference will be in the approach Revenue Scotland takes in collecting and managing the tax as the focus will be an online system.

 

REGISTERING FOR ADT

 

2.01 Who will need to register for the tax?

Aircraft operators required to make quarterly returns will need to register with Revenue Scotland for ADT. The operator must apply to Revenue Scotland to register no later than 30 days after they become liable to make quarterly returns.

2.02 When will registration for the tax start?

Registration for the tax will get underway in early 2018, prior to the introduction of ADT on 1 April 2018.

2.03 Do operators have to advise Revenue Scotland if they no longer plan to fly from Scottish airports?

Yes. If an aircraft operator is registered for ADT no longer plans to make flights from Scottish airports, they will be required to advise Revenue Scotland within 30 days of the decision to no longer operate. Doing so helps Revenue Scotland to maintain its register and avoids the need to approach the aircraft operator for an ADT return unnecessarily.

 

ADT RETURNS

 

3.01 Who will need to make ADT returns?

Every aircraft operator that carries a chargeable passenger on a chargeable aircraft on a flight that begins at an airport in Scotland is a ‘taxable person’. Every taxable person must make tax returns – either on quarterly or occasional basis.

3.02 Who is required to make quarterly returns?

An aircraft operator that is not making occasional returns must make quarterly returns.

3.03 Who is eligible to make occasional returns?

An aircraft operator is eligible to make occasional returns instead of quarterly returns if the aircraft operator does not intend to carry chargeable passengers on chargeable aircraft on more than 12 days in a given 12-month period and does not expect to have an ADT liability of more than £20,000 in that 12-month period.

3.04 When is an ADT return due?

Aircraft operators are required to make quarterly returns no later than 30 days after the end of each quarter (1 January to 31 March; 1 April to 30 June; 1 July to 30 September; 1 October to 31 December). Occasional returns that can be submitted on a flight-by-flight basis are due no later than 30 days after the date of the relevant flight.

3.05 How can I submit an ADT return?

The simplest and quickest method will be to submit the return through Revenue Scotland’s online Scottish Electronic Tax System (SETS) platform. SETS has been used for making 98% of returns for the other devolved taxes since April 2015. Over the coming months, we will be developing SETS for ADT and would welcome input from operators to support this. An alternative option to make returns by post using paper return forms will also be available.

3.06 How can I make a payment of ADT?

Tax payments must be made at the same time as returns are made. Revenue Scotland will accept a range of payment methods for ADT including BACS, CHAPS and direct debits. Aircraft operators submitting occasional returns will have the option to pay by debit or credit card. Guidance on payments and returns will be made available on the Revenue Scotland website before ADT is introduced.

3.07 Are aircraft operators able to make a change to an ADT return once it has been submitted?

Yes. Returns can be amended at any time within 12 months after the filing date. Amendments to returns can be done within the SETS platform which will record and store any changes that are made.

 

OTHER ISSUES

 

4.01 When will operators be charged a penalty or interest on ADT?

In certain circumstances, aircraft operators may be charged a penalty and/or interest. These include, but are not limited to: failure to register for the tax; failure to appoint a fiscal representative (where necessary); failure to make a return, making a late return or inaccuracies on a return(s); not paying the tax on time.

4.02 How will ADT information be stored?

Information submitted online through our SETS system will be stored securely within the system. Any returns provided on paper will be scanned and added to the SETS system.

4.03 Will aircraft operators be required to appoint a tax representative?

Operators without a fixed base in the European Economic Area (EEA) that are due to make quarterly returns will have to appoint an EEA-based tax representative and notify the details of the appointment to Revenue Scotland. Other aircraft operators may choose to appoint a tax representative if they wish. There are two types of tax representative: fiscal representatives, who are jointly and severally liable for the tax, and administrative representatives who can be appointed if a specified security is provided.

4.04 Will there be an option to submit returns as an agent on behalf of an aircraft operator?

Yes. ADT returns can be made on behalf of an aircraft operator - for example by organisations providing flight support services as long as they are authorised to act as an agent.

4.05 Can an aircraft operator apply to Revenue Scotland for a special accounting scheme ?

Yes. Approval to use a special accounting scheme will only be given if Revenue Scotland considers that it is appropriate having regard to the difficulties that the person has encountered or expects to encounter in obtaining or recording information about passengers and their agreements for carriage.

If an aircraft operator currently uses a special accounting scheme previously agreed with HMRC and wishes to use the same approach for the purpose of calculating ADT then a separate application to Revenue Scotland will be required. Further guidance on how to apply to Revenue Scotland for a special accounting scheme will be published on our website in early 2018.