British families planning a getaway this summer could find the cost of flying creeping up again, after it emerged that Treasury officials are quietly drawing up plans for a £1bn VAT raid on the fees airports charge airlines, a move the industry has branded a stealth tax on holidaymakers and exporters alike.

The proposals, being worked up inside HMRC, would impose the standard 20 per cent rate of VAT on top of the per-passenger charges levied by airports such as Heathrow, Gatwick and Manchester for the use of runways, terminals and ground services. Those fees are almost always passed straight through to passengers in the ticket price, meaning the burden would land squarely on travellers and the small and medium-sized businesses that depend on affordable air travel to reach overseas customers.

At Heathrow, where the regulated charge currently sits at around £24 a head, the change would add close to £5 to the cost of every passenger — before a single penny of Air Passenger Duty, fuel surcharge or booking fee has been added. The official APD rates published by HMRC already range from £15 to £106 for an economy seat depending on distance, and rose again from April under increases pencilled in at the Autumn Budget.

A retrospective sting

What is alarming airlines and airports most is not just the prospect of a new levy, but the possibility that Whitehall might backdate it. Industry sources tell Business Matters that ministers are exploring whether to apply the charge as far back as four years, the maximum permitted under current legislation, generating an immediate windfall for the Exchequer running to around £1bn from Heathrow alone.

Heathrow generated £1.13bn in revenue from passenger charges last year, while Gatwick reported £607m and Manchester Airports Group, owner of Manchester and Stansted, recorded £470m. Factoring in smaller hubs, the total VAT take could comfortably top £1.5bn, although officials have yet to clarify whether the tax would bite on both outbound and inbound legs.

One airline industry insider described the plan as “a stealth tax on families at a time when the cost-of-living crisis means many people are already struggling to afford a holiday”. The warning lands alongside fresh evidence that Britons are already tightening their belts on travel, Barclays data recently showed holiday spending falling for the first time since the pandemic as cost-of-living and Iran conflict fears bite.

Reeves giveth, HMRC taketh away

The disclosure could hardly come at a more awkward moment for the Chancellor. Even as her officials sharpen the pencil on aviation VAT, Rachel Reeves was on her feet in the Commons unveiling a £1bn cost-of-living package designed to take the sting out of the school summer holidays.

From 25 June to 1 September, theme parks, zoos, museums, cinemas, soft play centres and theatres will charge a reduced 5 per cent rate of VAT in place of the usual 20 per cent. Children’s meals are included in the cut, which the Treasury values at £300m. The Government claims the measure will shave £20 off a theme-park day out for a family of four, £1.50 off cinema tickets and £2 off a family meal.

Fuel duty will be frozen for the rest of the year, free bus travel will be offered to children throughout August, and import taxes have been trimmed on a basket of staple foods. The energy-intensive chemicals and ceramics sectors, meanwhile, will share a £470m lifeline aimed at protecting jobs in some of the country’s most exposed manufacturing hubs.

Ms Reeves told MPs the package would be paid for by raising “hundreds of millions of pounds a year” from oil and gas majors such as BP and Shell, with the Office for Budget Responsibility due to assess the impact at the autumn fiscal event. Broader support on household energy bills was held in reserve, with the Chancellor signalling that targeted help would follow in the autumn “if bills continue to rise”.

The hospitality and visitor economy were quick to welcome the move. Fiona Eastwood, chief executive of Merlin Entertainments, which operates Alton Towers and Legoland, confirmed the discounted rate would apply to both admission tickets and children’s meals. Kate Nicholls, chair of UKHospitality, said it was “the quickest and simplest way to lower prices and boost consumer confidence”.

Aviation cries foul

The aviation sector, however, is in no mood to applaud. An Airlines UK spokesman said: “The UK is already one of the most overtaxed aviation markets in the world and, as the cost burden increases, we risk becoming even more uncompetitive. The only people cheering a move like this would be those running rival airports overseas.”

Industry analysis backs the point. The Office for Budget Responsibility already forecasts APD will raise close to £5bn a year by the end of the decade, while Airlines UK research suggests mandatory taxes can account for as much as half the price of an off-peak short-haul ticket. Bolting VAT on to airport charges would compound a tax burden that low-cost carriers say is already pushing routes, and the SME-friendly connectivity that comes with them, into mainland Europe.

Andrew Griffith, the shadow business secretary, was blunter still: “Any additional tax on aviation is a tax on doing business, a brake on exports or an attack on hard-working families. No government on the side of growth would indulge this idea.”

The proposals may also collide with international aviation rules, which broadly exempt airfares from VAT. Heathrow is understood to be taking specialist tax advice, while one industry source characterised the work inside HMRC as a “fishing trip” by officials looking for new revenue. “It’s a very technical conversation, with HMRC trying to work out if they can capture additional tax revenue,” the source said. “The question is whether it’s going to move forward and, if it does, whether it is going to hit passengers.”

What it means for SMEs

For Britain’s small and mid-sized businesses, the stakes are real. Air freight, sales travel and trade-show attendance all sit downstream of airport economics, and any uplift in landing charges feeds quickly into per-trip costs. It is also the second time in twelve months that the regulator has tangled with the Heathrow pricing model, earlier this year Heathrow was forced into a bigger cut of passenger landing fees by the Civil Aviation Authority, capping charges below the level the airport had sought.

Airports are unlikely to absorb a new VAT charge in-house. Heathrow has been lobbying loudly for measures to restore competitiveness, including the reinstatement of VAT-free shopping for international visitors, warning that the UK is losing ground to European rivals on tax. Adding a fresh 20 per cent layer to its core regulated charge would, the airport believes, run directly counter to the Government’s own growth narrative.

A government spokesman insisted there was no formal policy change in train, telling reporters: “The Government is not considering any changes to tax rules in this area. HMRC routinely engage businesses on how existing tax rules are being applied.”

That is unlikely to settle nerves in boardrooms in West London or aboard the airlines. For now, families booking summer flights can enjoy a temporary VAT cut at the theme-park turnstile, but the smart money in the aviation lobby is on a rather chillier autumn at the airport check-in desk.

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On Friday 22nd of May, Laura Pomfret joined Morning Live to talk about the rise of County Court Judgments (CCJs) across the UK, known as decrees in Scotland, which are issued to individuals who fail to repay money they owe.

Laura explains why the number of CCJs has increased, what your options are if you receive one, and advice on how to avoid an unpaid debt becoming a court case.

To find the steps and court forms involved in asking a court to vary the terms of a CCJ or decree, such as requesting to pay in instalments, or even how to get a judgment cancelled, you can click on the links below.

For England, Wales and Northern Ireland you can click here., external

For Scotland you can click here., external

Laura also mentioned temporary protection from your creditors while you get debt advice and make a plan.

In England and Wales this is called Breathing Space, and you can find information on that by clicking here., external

In Scotland this is called a moratorium, and you can find more information on that here., external

Federal Reserve officials all but retired the question that had dominated their debates for the past two years—whether to cut interest rates—and began more seriously at their meeting last month to weigh the opposite: whether to raise them.

“A majority of participants highlighted…that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2%,” according to the minutes of the April policy meeting, released Wednesday.

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While William Shakespeare in his poetic verse wrote “What’s in a name”, markets seem to prove that “Everything is in the name”. The shares of infrastructure and real estate company Parle Industries jumped another 5% on Friday, hitting the upper circuit for the third consecutive session after Prime Minister Narendra Modi gifted his Italian peer Giorgia Meloni a bag of ‘Melody’ toffees, made by the unlisted FMCG company Parle Products.

During his visit to Italy, PM Modi gifted a bag of candies to his Italian counterpart. The Italian PM shared a video of their interaction on social media, which has now gone viral. In the video, she described it as a “very, very good toffee.” While social media went into a frenzy over PM Modi gifting PM Meloni a bag of ‘Melody’, investors sweetened the wrong ‘Parle’ stock.

Mumbai-based Parle Industries is associated with developing infrastructure and real estate projects, along with managing paper waste recycling operations. The company has no connection with its namesake Parle Products, which makes the popular Parle-G biscuits and other products, including the melody toffee.Parle Products is one of India’s oldest consumer goods companies. The viral moment also spilt into corporate branding campaigns, with Air India posting on X, “Some places don’t need introductions, just the right melody,” underscoring how the Modi-Meloni Melody exchange quickly evolved from a diplomatic gesture into a marketing moment for Indian brands.

In an interview with CNBC-TV18, Parle Products Vice President Mayank Shah said that Melody is already exported and available in 100 countries. He added that PM Modi’s gesture was a nice way of pushing Indian products and giving a global stage.
The Melody moment also came at a time when there were speculations that Parle Products was in early-stage talks for a potential initial public offering. Modi’s Meloni gift could have been a great global roadshow before aiming for D-Street entry. However, Parle Products management told CNBC-TV18 that it is not considering listing on exchanges right now.

Parle Industries share price

Parle Industries shares jumped 5% to Rs 5.78 apiece on BSE on Friday to hit the upper circuit for the third consecutive session. The microcap company has seen its share price rally 16% in just three sessions after the viral ‘Melody’ moment.

The company currently has a market capitalisation of more than Rs 28 crore.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Consumption trends in India’s equity markets continue to show a mixed but gradually improving picture, with investors increasingly becoming selective across consumer-facing sectors. While quick service restaurants (QSR) continue to face pressure, premium retail and select FMCG-linked businesses are showing stronger resilience and visibility.

Speaking to ET Now, market expert Rahul Shah from MOFSL said that Page Industries stands out as one of the strongest recovery stories within the consumer space. He highlighted improving growth momentum and positive management commentary, pointing out that “strong performance, upbeat on the sales part, 11% quarter-on-quarter growth, and we believe that after a long time we have seen this kind of growth coming back in Page.” He also noted that earnings estimates have been revised upward and that the company’s product expansion through digital platforms and retail channels is supporting visibility. According to him, Page Industries offers rare double-digit growth visibility in a volatile market and remains reasonably valued given its long-term growth outlook.

On other consumer names such as Nykaa and Honasa, Shah adopted a more cautious stance. He said Nykaa was largely in line with expectations and while the numbers were stable, “I feel that there is limited upside on the stock,” indicating that major re-rating potential may be capped in the near term. Honasa too was seen as largely aligned with expectations without strong immediate triggers for upside.

On broader consumption strategy, Shah suggested a balanced portfolio approach combining select FMCG names with premium consumption plays. He emphasized Marico as a consistent performer in the FMCG space, stating that it continues to stand out due to market share strength, product launches, and earnings sustainability. Along with Page Industries, he sees FMCG leaders like Marico as key anchors for playing the consumption theme in the current market environment.

In the insurance space, Shah reiterated the importance of maintaining sector allocation in portfolios. While acknowledging strong numbers from LIC, including growth in value of new business margins and annual premium equivalent, he expressed a preference for Max Financial Services within the space. He highlighted strong margins, robust growth, and expanding distribution channels beyond banks, noting that “Max remains our preferred bet and we see 20% upside in it.” At the same time, he indicated that LIC could act as a rerating candidate given improving sentiment and market positioning.

On the pharma sector, Shah observed that the space continues to outperform broader markets, supported by global uncertainty and defensive positioning. He noted that the Nifty Pharma index is at a 52-week high and highlighted strong performance from Sun Pharma and Aurobindo Pharma. While acknowledging that Cipla and Dr Reddy’s delivered weaker results, he maintained a constructive outlook on large-cap pharma, suggesting that Sun Pharma remains a key stock to watch, especially after its earnings, while Aurobindo Pharma also looks attractive after meeting street expectations.
Overall, the market narrative continues to shift towards selective consumption recovery, steady pharma strength, and insurance-driven defensive growth. With earnings visibility diverging across companies, investors are increasingly focusing on stock-specific opportunities rather than broad sector bets.

1506 ET – Oil futures post back-to-back losses as President Trump says the U.S. is in the final stages of negotiations with Iran, raising hopes of a deal to end the conflict and reopen the Strait of Hormuz. Still, Trump adds that failure to reach a deal meant a resumption of military action. “Typical Trump style, but the market is buying into the possibilities,” says Mizuho’s Robert Yawger in a note. Hopes for an agreement led the market to overlook a bullish EIA inventory report showing U.S. commercial crude stocks down by 7.9 million barrels last week, although distillate stocks rose for a second straight week. WTI settles down 5.7% at $98.26 a barrel and Brent falls 5.6% to $105.02.(anthony.harrup@wsj.com)

Oil Futures Extend Losses on Hopes for U.S.-Iran Deal

1235 ET – Oil futures extend losses as the market focuses on hopes for a deal to end the U.S.-Iran conflict and reopen the Strait of Hormuz. The fact prices could fall further following a bullish U.S. crude stock drawdown for last week “tells me it’s more likely than not some kind of negotiation is happening,” says BOK Financial’s BOKF -0.17%decrease; red down pointing triangle Dennis Kissler. “The market is anticipating some sort of agreement.” The EIA reported a 7.9 million barrel decline in commercial crude stocks, along with a 9.9 million barrel release from the Strategic Petroleum Reserve. WTI is off 5.2% at $98.75 a barrel and Brent falls 5.5% to $105.16 a barrel. (anthony.harrup@wsj.com)