London's Heathrow Airport has appealed to UK Chancellor Rachel Reeves not to milk the aviation and tourist industries for much-needed tax revenue, warning its competitive position could be at risk.
Reinstating tax-free shopping must be a key part of a broader national tourism strategy,
Sally Ding
Heathrow's chief financial officer Sally Ding told The National that those who run Europe's busiest airport are "really pleased that the new government recognised that the aviation industry is very important for economic growth", and that "Heathrow plays a vital role". What they really want to see from the government, however, are "cross-department, joined-up policies that should put aviation in a more competitive position, rather than jeopardise our competitive position”.
As the country's largest port, Heathrow is at the centre of UK trade, with 234 destinations including many in the US, China and the UAE. In 2023, Heathrow handled 1.43 million tonnes of goods worth £198.5 billion, more than all other UK airports combined. Meanwhile, passenger numbers at Heathrow are continuing to rise, and are up 6 per cent for the nine months to the end of September, to 63.1 million. That has prompted Heathrow to raise its full-year 2024 passenger forecast to a record 83.8 million.
Growing capacity for both cargo and passenger traffic at Heathrow means the airport is constantly looking to expand. It will invest more than £1 billion this year in its expansion plans, which include a new baggage system for Terminal 2.
However, an issue coming back into the spotlight is the construction of a third runway. Ms Reeves is on record as having no objection to the third runway, provided stringent environmental criteria are met, and much of the business sector is in favour of it given the economic expansion it should bring. But the Mayor of London, Sadiq Khan, and local groups, are vehemently opposed to it on the grounds that it will increase air and noise pollution in West London.
For its part, Heathrow has gone rather quiet on the subject in recent years, preferring to concentrate on more tangible and immediate areas of the airport's expansion. “We are reviewing that plan [for the third runway] internally and we want to make sure we take time to get that plan right," Ms Ding told The National.
"We want to make sure all the facts and data are correct, and the plan is fit for the future and will meet the four tests met by the government. The plan is important for this country, and we want to make sure it supports economic growth.”
Air passenger duty
The passenger numbers alone are always a tempting target for tax raising. In March Jeremy Hunt, who was then the Conservative chancellor, increased the rate of air passenger duty (APD) for premium economy, business class and first class tickets, a measure that is set to take effect next year. Most travellers won't realise they are paying APD as it is included in the price of the ticket. It is easy for the government to collect, but airlines complain it risks a reduction in demand.
The charge varies depending on flight class and destination. At the moment, APD adds £7 to the cost of a domestic flight in economy class and £202 for a premium ticket to long-haul destinations in Asia, Australasia or Latin America. Most passengers going to (or coming from) Europe or North Africa will pay £13. For private jets, the tax levied is considerably higher.
For example, from April next year a family of four travelling to Singapore could pay almost £900 to the UK government just to leave the country. This works the other way as well, so a steep rise in APD in next week's budget might deter inbound tourists.
For its part, Heathrow said "any increase in tax on aviation needs to be ring-fenced to support the green transition of the sector, to protect the sector's ability to support the UK economy in the long term. Without this, higher APD will mean the UK aviation sector struggles to compete globally."
'Tourist tax'
While a large extra rise in the APD could prove a deterrent to incoming tourists given the rise in ticket prices, another problem awaits them if they do make the journey: the lack of VAT-free shopping, or the so-called "tourist tax".
Until January 2021, tourists could claim the VAT back on purchases they made in the UK. That retail incentive was removed by Rishi Sunak when he was chancellor, before he became prime minister. Much lobbying took place by senior figures in the UK's retail and hospitality sectors, as well as from Heathrow itself, to reinstate VAT-free shopping for tourists and several arguments were made citing the millions of pounds lost, as overseas tourists chose other destinations in the EU to splash their cash.
Before his budget in March, Jeremy Hunt tasked the Office for Budgetary Responsibility (OBR) to carry out a review of the VAT Retail Export Scheme, but in the event decided not to stop the so-called tourist tax. The OBR estimated that bringing back VAT-free shopping for tourists would cost almost £1.5 billion in lost revenue over the next three years. The question now is whether or not Ms Reeves will make the same decision in a week's time.
“VAT [-free shopping] is one of our asks of the government to be considered, because it puts the UK in a much less competitive position, not only in the aviation industry, but across the retail industry as well," Ms Ding told The National.
Meanwhile, Dee Corsi, chief executive of the New West End Company, which represents several large retailers in London, said the absence of VAT-free shopping means the government is "failing to unlock [tourists'] true spending power, with the likes of Paris and Milan reaping the rewards instead".
"Reinstating tax-free shopping must be a key part of a broader national tourism strategy," she told The National. "It’s a crucial step towards boosting the inbound tourism economy and restoring the UK's global competitiveness."
But some analysts say VAT-free shopping is unlikely to be reintroduced in next week's budget, not because the sums don't add up, but because the politics won't allow it. “There is clearly an economic argument for reinstating tax-free shopping," Diane Wehrle, founder and chief executive of Rendle Intelligence and Insights, told The National.
"However, while I would like to believe that the numbers don’t lie and it would be a realistic policy change, with the government’s focus on workers and working people and the need for strong optics on this, I believe that their priorities for this budget will be elsewhere.”
Continental champions
Best Asian Player: Massaki Todokoro (Japan)
Best European Player: Adam Wardzinski (Poland)
Best North & Central American Player: DJ Jackson (United States)
Best African Player: Walter Dos Santos (Angola)
Best Oceanian Player: Lee Ting (Australia)
Best South American Player: Gabriel De Sousa (Brazil)
Best Asian Federation: Saudi Jiu-Jitsu Federation
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UAE currency: the story behind the money in your pockets
Results:
6.30pm: Handicap | US$135,000 (Dirt) | 1,400 metres
Winner: Rodaini, Connor Beasley (jockey), Ahmad bin Harmash (trainer)
7.05pm: Handicap | $135,000 (Turf) | 1,200m
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7.40pm: Dubai Millennium Stakes | Group 3 | $200,000 (T) | 2,000m
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8.15pm: UAE Oakes | Group 3 | $250,000 (D) | 1,900m
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8.50pm: Zabeel Mile | Group 2 | $250,000 (T) | 1,600m
Winner: Mythical Image, William Buick, Charlie Appleby
9.20pm: Handicap | $135,000 (T) | 1,600m
Winner: Major Partnership, Kevin Stott, Saeed bin Suroor
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Engine: 3.8-litre V6
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If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
COMPANY PROFILE
Name: Lamsa
Founder: Badr Ward
Launched: 2014
Employees: 60
Based: Abu Dhabi
Sector: EdTech
Funding to date: $15 million
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
Bugatti Chiron Super Sport - the specs:
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Bugatti Chiron Pur Sport - the specs:
Engine: 8.0-litre quad-turbo W16
Transmission: 7-speed DSG auto
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0-100kph in 2.3 seconds
0-200kph in 5.5 seconds
0-300kph in 11.8 seconds
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The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
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Transmission: 8-speed dual-clutch automatic
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On sale: Now, deliveries expected later in 2025
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How to report a beggar
Abu Dhabi – Call 999 or 8002626 (Aman Service)
Dubai – Call 800243
Sharjah – Call 065632222
Ras Al Khaimah - Call 072053372
Ajman – Call 067401616
Umm Al Quwain – Call 999
Fujairah - Call 092051100 or 092224411
SPECS
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Power: 235hp
Torque: 350Nm
Transmission: Nine-speed automatic
Price: From Dh167,500 ($45,000)
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Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
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How much of your income do you need to save?
The more you save, the sooner you can retire. Tuan Phan, a board member of SimplyFI.com, says if you save just 5 per cent of your salary, you can expect to work for another 66 years before you are able to retire without too large a drop in income.
In other words, you will not save enough to retire comfortably. If you save 15 per cent, you can forward to another 43 working years. Up that to 40 per cent of your income, and your remaining working life drops to just 22 years. (see table)
Obviously, this is only a rough guide. How much you save will depend on variables, not least your salary and how much you already have in your pension pot. But it shows what you need to do to achieve financial independence.
The specs
Engine: 2.0-litre 4-cyl turbo
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New UK refugee system
- A new “core protection” for refugees moving from permanent to a more basic, temporary protection
- Shortened leave to remain - refugees will receive 30 months instead of five years
- A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
- To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
- Under core protection there will be no automatic right to family reunion
- Refugees will have a reduced right to public funds
UAE currency: the story behind the money in your pockets
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Three-day coronation
Royal purification
The entire coronation ceremony extends over three days from May 4-6, but Saturday is the one to watch. At the time of 10:09am the royal purification ceremony begins. Wearing a white robe, the king will enter a pavilion at the Grand Palace, where he will be doused in sacred water from five rivers and four ponds in Thailand. In the distant past water was collected from specific rivers in India, reflecting the influential blend of Hindu and Buddhist cosmology on the coronation. Hindu Brahmins and the country's most senior Buddhist monks will be present. Coronation practices can be traced back thousands of years to ancient India.
The crown
Not long after royal purification rites, the king proceeds to the Baisal Daksin Throne Hall where he receives sacred water from eight directions. Symbolically that means he has received legitimacy from all directions of the kingdom. He ascends the Bhadrapitha Throne, where in regal robes he sits under a Nine-Tiered Umbrella of State. Brahmins will hand the monarch the royal regalia, including a wooden sceptre inlaid with gold, a precious stone-encrusted sword believed to have been found in a lake in northern Cambodia, slippers, and a whisk made from yak's hair.
The Great Crown of Victory is the centrepiece. Tiered, gold and weighing 7.3 kilograms, it has a diamond from India at the top. Vajiralongkorn will personally place the crown on his own head and then issues his first royal command.
The audience
On Saturday afternoon, the newly-crowned king is set to grant a "grand audience" to members of the royal family, the privy council, the cabinet and senior officials. Two hours later the king will visit the Temple of the Emerald Buddha, the most sacred space in Thailand, which on normal days is thronged with tourists. He then symbolically moves into the Royal Residence.
The procession
The main element of Sunday's ceremonies, streets across Bangkok's historic heart have been blocked off in preparation for this moment. The king will sit on a royal palanquin carried by soldiers dressed in colourful traditional garb. A 21-gun salute will start the procession. Some 200,000 people are expected to line the seven-kilometre route around the city.
Meet the people
On the last day of the ceremony Rama X will appear on the balcony of Suddhaisavarya Prasad Hall in the Grand Palace at 4:30pm "to receive the good wishes of the people". An hour later, diplomats will be given an audience at the Grand Palace. This is the only time during the ceremony that representatives of foreign governments will greet the king.
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
