British travellers are among the most heavily taxed in the world, so the announcement by The Chancellor in this week’s budget to postpone another rise in Air Passenger Duty (APD) will come as a relief to many as they plan their annual holidays. Successive Labour Chancellors have been steadily raising APD over the last 6 years, this tax has increased by 325% on long-haul flights. For a family of four, duty has risen from £80 to £340 for a flight to Australia and £20 to £48 on a flight to France.
The cost of travelling abroad is also affected by the Pound dropping in value against major currencies like the Dollar and Euro. It remains to be seen if the taxes and cuts announced in the budget will have sufficient effect quickly enough to increase the value of the Pound against foreign currencies. The value of Sterling is also linked to when and by how much the Bank of England will increase interest rates this year.
It had previously been announced in the June 2010 Budget that Insurance Premium Tax (IPT) on travel insurance would be increasing from 17.5% to 20% in January 2011, and no further increase was announced in this budget, which was a small crumb of comfort. Despite the increases in IPT travel insurance still represents value for money and is a must buy if you are going abroad.
Travel insurance will cover a range of things from cancellation of the holiday, delayed flights, lost luggage and medical emergencies to name but a few. If you have existing medical conditions it is even more important to have the appropriate travel insurance policy, a specific medical conditions travel insurance. You can purchase travel insurance for medical conditions from specialist providers like Insurancewith, whose policies start at as little as £16.18.