ITM ANNOUNCES TAXATION SURVEY RESULTS
Timely research as APD changes cause industry outrage.
The Institute of Travel & Meetings (ITM) UK & Ireland today announced the results of its latest ITM Research report on taxation and subsidies, a timely release in light of recent announcements by the UK government's treasury on increases in Air Passenger Duty (APD) and reductions in Value Added Tax (VAT).
The research, undertaken across 185 travel and meetings buyers representing over 40% of the FTSE 100, shows widespread confusion surrounding the application of VAT to the travel and meetings billing process but a suprising support for the application of APD even in light of the impending Emissions Trading Scheme (ETS) entry. This support was subject, however, to the diversion of funds raised by APD into supporting efforts to develop greener aviation.
Commenting on the results, in light of recent government annoucements Paul Tilstone, Chief Executive of ITM, said, "The taxation tool is used by government to raise revenues and/or change behaviour. The increases in APD and the fuel subsidies provided to the aviation industry suggest a confused approach which is not designed to change behaviour, rather to simply raise cash. This is particularly harsh at this difficult time for this sector. If the government had announced the increases alongside a series of investments into developing more sustainable aviation I really don't think the price hikes would cause much issue."
The research also covered the issues of VAT application and in what circumstances the tax was being applied. Colin Goldney, ITM Research's partner, suggests that the government needs to provide greater guidance on the application of VAT in the process as the results seem to suggest a varying approach. "With respondants approximately split 50/50 on whether their service providers apply VAT to certain travel and meetings transactions it is clear that the sector needs educating and government needs to address this issue."
As a result of the survey, ITM is now planning an event in June '09 which will in part focus on the application of taxation in travel and meetings management and they will be inviting an HMRC (Her Majestey's Customs and Revenue) representative to provide clarity on the issue.
The full research article is available to purchase in the ITM shop.
