Air travelers, brace yourselves! Regional airports across the UK are facing a financial storm, with soaring property taxes threatening to hike ticket prices. A recent analysis by PA Media has uncovered a dire situation for regional airports, which are among the sectors experiencing the steepest increases in business rates. This overhaul of property valuations is sending shockwaves through the industry.
While London's Heathrow and Gatwick are also feeling the pinch, the real impact is being felt outside the capital. Global tax firm Ryan's calculations reveal a staggering sixfold jump in rateable values for some airports, resulting in skyrocketing tax bills. Even with transitional relief, which caps increases at 30% next year, regional airports will still face some of the largest cash increases in the country.
The situation is dire, with most airports expecting their bills to more than double over the next three years. Manchester airport, for instance, is set to see its business rates bill soar by £4.2 million to £18.1 million next year, according to Ryan's data. Bristol airport will face a £1.2 million increase to £5.2 million, while Birmingham International airport will see a £1.8 million rise to £7.6 million. Newcastle International airport is in line for a £244,755 increase to £1.1 million.
Alex Probyn, the practice leader for Europe and Asia-Pacific property tax at Ryan, warns, "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."
The financial strain is already causing ripples. Airport operators are concerned that the tax blow may hinder investment in the sector. A Manchester Airports Group spokesperson highlights the dilemma: "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 reevaluate our plans to invest over £2 billion in our airports across the UK over the next five years."
The impact on air travel is undeniable. As the industry grapples with these costs, air travel is set to become more expensive, affecting hard-working people and making global trade more challenging for businesses. AirportsUK, the trade group representing the sector, is fighting back, calling the business rates plan "shortsighted" and warning of negative consequences for local economies that rely on airport connectivity.
The group emphasizes the importance of a long-term review into how airport business rates are calculated, engaging with the Treasury to ensure a positive outcome for the industry. Other regional airports facing significant bill increases include Liverpool airport, East Midlands International airport, and Bournemouth airport, each facing substantial hikes in their business rates.
