Air passengers are being cautioned to expect a surge in airfare prices as regional airports across the UK prepare for significant increases in property taxes next year. An analysis of official Government data by the Press Association reveals that regional airports face some of the steepest business rates hikes in the UK as part of a comprehensive property assessment revamp.
While major airports like Heathrow and Gatwick in London are also experiencing substantial increases in business rates, the most severe impacts are expected outside of the capital, particularly hitting regional airports the hardest. According to Ryan, a global tax consultancy, Valuation Office Agency figures show that certain airports have seen their rateable values spike over sixfold in the latest property reassessment, leading to soaring tax bills.
Despite a transitional relief measure capping rises at 30% next year, regional airports are still set to encounter significant cash increases. Most airports are projected to see their bills more than triple over the next three years.
Manchester Airport is among the most affected, with its business rates projected to rise by £4.2 million to £18.1 million next year. Bristol Airport is facing a £1.2 million increase to £5.2 million, and Birmingham International Airport anticipates a £1.8 million surge to £7.6 million. Newcastle International Airport is expected to see a rise of £244,755 to £1.1 million.
Alex Probyn, who heads the property tax practice for Europe and Asia-Pacific at Ryan, expressed concern, stating that regional airports cannot bear the brunt of such massive cost increases. Probyn emphasized that these increases will ultimately impact ticket prices as they flow through the system, affecting airport charges and airline costs.
Airport operators have raised worries that these tax hikes could hinder investment in the sector. Manchester Airports Group spokesperson stated that the steep increases in rates will force them to reconsider their plans to invest over £2 billion in UK airports over the next five years, potentially leading to increased air travel costs.
The trade group AirportsUK is preparing a response to the Treasury’s consultation on the business rates plan, criticizing the proposed increases as short-sighted and warning about the negative repercussions on businesses relying on airport connectivity across England. They stressed the importance of government intervention and highlighted the need for a review of how airport business rates are calculated to ensure positive outcomes for airport investment and economic growth.
Other regional airports facing substantial rate hikes include Liverpool Airport with a £233,100 increase to £1 million, East Midlands International Airport with a £437,895 leap to £1.9 million, and Bournemouth Airport dealing with a £102,398 jump to £443,723.