There are two taxes relating to transport that are being discussed in Scotland at the moment. Their environmental impact is being given primary importance, but not everyone is happy with the other consequences.
Will the Scottish Government pass workplace parking tax?
This Wednesday the Scottish Parliament debates the introduction of a workplace parking tax. If it is agreed, employers will have to pay a yearly tax on each parking space they provide for their staff. This will be under the control of local councils. The amendment to the Transport Bill has been agreed by the Green Party and SNP, but needs to be discussed in open parliament.
The idea is to encourage commuters to move from their own vehicle to public transport, thus reducing pollution as part of a plan to rectify our global climate emergency situation. The concern is that employers will simply charge their employees the cost of the parking levy so that it does not eat into their bottom line. Considering the rising cost of living, other tax liabilities and continuing economic uncertainty throughout the UK, this may be a cost too far for some people.
No air tax cut in Scotland
This is a massive turnaround by the Scottish Parliament. They were on track to reduce Air Passenger Duty Tax by 50%, with a view to getting rid of it completely.
Air Passenger Duty Tax is payable by anyone flying out of the UK at various rates, depending on your destination. The UK’s Air Passenger Duty is one of the highest in Europe and there are concerns about how this affects our connectivity. As part of their new devolved power, the Scottish Government can now set their own rate, which can be different to that of the rest of the UK. It is also set to be called Air Departure Tax, rather than Air Passenger Duty Tax.
What are the consequences of this policy change?
Obviously, this is a blow to Scotland’s airports, who were looking forward to the benefits of the reduced Air Departure Tax. Edinburgh Airport’s report cited a predicted 4,000 more jobs and £1bn into the Scottish economy, if the initial plan to reduce and eventually get rid of the Airport Duty Tax was followed.
It’s Chief Executive, Gordon Dewar, said of the recent announcement: “We’ve gone from personal commitments to all-out cancellation in the space of just two weeks, which shows just how reactionary this decision is. It does not show leadership and means airports and airlines have been led down a path of failed promises for three years by this Scottish government. It also raises questions about continued support for our tourism sector when airlines have already walked away from Scotland due to this failure to deliver.”
And, as reported by the BBC, the chief executive of the Scottish Chamber of Commerce, Liz Smith said this: “alarming u-turn”… “would do nothing to reduce emissions and will have a significant and deleterious impact on the Scottish economy”.
Interestingly, the chief executive of AGS Airports (Aberdeen and Glasgow airports’ owners), Derek Provan, referenced how many routes had been affected by the current Air Passenger Duty Tax: “Over the course of the past year alone, we have seen the withdrawal by airlines of almost 30 routes from Aberdeen and Glasgow airports because of Air Passenger Duty.”
What will the positive impact be?
But it really isn’t a surprising change, when the Scottish government has recently set itself challenging greenhouse gas emissions targets, in response to the climate change emergency. They want Scotland to achieve the net-zero emissions by 2045, which is five years quicker than the rest of the UK.
Finance Secretary Derek Mackay said: “All parts of government and society have a contribution to make to meeting this challenge. We continue to support our tourism industry, which is going from strength to strength, and we will work with the sector to develop in a sustainable way. We welcome their efforts – and those of the aviation industry – to reduce carbon emissions.”
How will these transport taxes affect you in the short and long term?