Air travellers are being warned to expect higher ticket prices after analysis revealed regional airports across the UK are facing some of the steepest increases in property taxes of any sector next year.
Figures drawn from official Government data and analysed for the Press Association show that airports outside London are set to be hit particularly hard by changes to business rates following a major overhaul of property valuations. The reassessment has led to dramatic jumps in the “rateable values” used to calculate the tax, pushing up bills across the sector.
While major hubs such as Heathrow and Gatwick are also facing substantial increases, the most severe rises are concentrated among regional airports.
Calculations by global tax firm Ryan, based on Valuation Office Agency data, found that in some cases rateable values have increased more than six-fold.
Although transitional relief will cap annual increases at 30% next year, airports will still experience some of the largest cash rises in the country. Most are expected to see their business rates bills more than double over the next three years.
Manchester Airport is among the worst affected, with its bill forecast to rise by £4.2million to £18.1million next year.
Bristol Airport is set for a £1.2million increase to £5.2million, while Birmingham International Airport’s bill is expected to climb by £1.8million to £7.6million.
Newcastle International Airport will see a smaller but still significant rise of nearly £245,000, taking its bill to £1.1million.
Alex Probyn, property tax lead for Europe and Asia-Pacific at Ryan, said regional airports were facing an “unprecedented” cost shock.
“With a sector-wide uplift of nearly 300%, regional airports simply cannot absorb increases of this scale,” he said. “These costs will feed through to airport charges, then airline costs, and ultimately into higher ticket prices for passengers.”
Airport operators have also warned that the rising tax burden could slow investment.
A spokesperson for Manchester Airports Group said airports were already among the UK’s highest business rates payers, but increases of more than 100% were forcing a rethink on plans to invest more than £2billion over the next five years.
“It is inevitable that air travel will become more expensive,” the spokesperson added.
AirportsUK, the industry’s trade body, said the plans were short-sighted and risked harming local economies that depend on airport connectivity.
The group is preparing a response to the Treasury’s consultation on business rates, which closes in February, and is urging the Government to rethink how airport taxes are calculated to support long-term growth.
