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Air passengers are being warned to brace for ticket rises as regional airports across the UK face “unprecedented” rises in property tax next year.
Analysis of government data for PA Media has revealed regional airports are among those facing the steepest increases in business rates of any sector in the UK amid an overhaul of property valuations underpinning the tax.
While London’s Heathrow and Gatwick are also being hit with huge increases in their business rates bills, the figures show that the most extreme cases are focused outside London, with regional airports poised to suffer.
Global tax firm Ryan’s calculation of Valuation Office Agency data found that the rateable values have jumped more than sixfold in some cases in the latest property revaluation, sending tax bills soaring higher.
Even with transitional relief, which limits increases to 30% next year, regional airports will still endure some of the largest cash increases in the country.
And most airports face their bills more than doubling over the next three years.
Manchester airport is among the worst affected, with its business rates bill likely to increase by £4.2m to £18.1m next year, according to Ryan’s data.
Bristol airport will receive a £1.2m increase to £5.2m, while Birmingham International airport faces a £1.8m rise to £7.6m.
Newcastle International airport is in line for a £244,755 rise to £1.1m.
Alex Probyn, the practice leader for Europe and Asia-Pacific property tax at Ryan, told PA Media: “With an unprecedented 295% sector-wide uplift, regional airports simply cannot absorb a cost shock of this magnitude.
“These increases will inevitably flow through the system: first into airport charges, then into airline costs, and ultimately into ticket prices.”
Airport operators have said the tax blow may also hold back investment in the sector.
A Manchester Airports Group spokesperson said: “Airports were already some of the highest rates-payers in the country and were prepared to pay significantly more.
“But increases of more than 100% mean we have to look again at our plans to invest more than £2bn in our airports across the UK over the next five years.
“It is inevitable air travel will become more expensive as the industry absorbs these costs. That impacts hard-working people throughout the country and makes global trade harder for businesses.”
AirportsUK – the trade group representing the sector – is working on a response to the Treasury’s consultation on the business rates plan, which closes in February.
It said the plans were “shortsighted” and would “have a knock-on effect for the businesses that depend on airport connectivity in all areas of England”.
This risks “negatively impacting local economies that depend on the supply chains, tourists and connections their airports provide”, according to the group.
“That is why the long-term review into how airport business rates are calculated, also announced by government, is so important and we will engage with Treasury to ensure this delivers the positive outcome airports need to drive investment and economic growth.”
Other regional airports heading for large bill increases include Liverpool airport with a £233,100 rise to £1m, East Midlands International airport with a £437,895 increase to £1.9m, and Bournemouth airport with a £102,398 increase to £443,723.
