Welcome to chapter two of our latest instalment examining the state of business aviation in 2025.

‘The super-rich must foot the bill for their carbon footprint, not ordinary Europeans. This means more taxes on the super-rich, like wealth taxes, and higher taxes on superyachts and private jets’.��Carbon Inequality Kills – Oxfam report 29 October 2024��

NGOs, the media, and academics are constantly talking about a �wealth� or �luxury� tax on a country�s richest citizens. And governments appear to have taken the bait.�

On 30 October, 2024, the UK Government revealed their new budget plans which included significant increases for air passenger duty (APD) payments. �This measure may therefore impact individuals who travel by air, who may see an increase in air fares. Those individuals who travel in a non-economy class and by larger, more luxurious private jets may see a bigger increase.���

Starting in April 2025 there will be a 13% increase for commercial airline passengers and a 50% increase for those travelling in a business jet. In simple terms this will be a tax of between �14 to �224 (depending on distance travelled) per passenger travelling business class or above on commercial airlines, and �84 to �673 per passenger departing the UK on a business aircraft.�

In a more dramatic move, the French Government has enacted the �Chirac tax�, a surcharge on the civil aviation tax which became effective on 1 March 2025. For long-haul business class flights, the tax on airline tickets would triple, increasing from �60 to �200 per ticket. For business aviation, the tax would jump to �2,100 per passenger for long-haul flights.��

France has the busiest business aviation routes in Europe and the industry is incredibly concerned of the effect this will have on their businesses and livelihoods.�

But what is a luxury tax? According to Investopedia it is a �sales tax or surcharge levied only on certain products or services that are deemed non-essential or accessible only to the super-wealthy�.��The logic appears to be irresistible: the rationale is to reverse the age-old trend of rising inequality and to�move society in the opposite direction, that of promoting equality.��

Who does not want that? Who is against inequality? Who is against getting more revenue from those�most able to pay while reducing the burden on the needy?�Unlike job centres and hospitals, wealth tax proposals are free to create and you can make them as�extravagant as you like.�A group of 30 MPs, including Diane Abbott and the Green leader Carla Denyer, claim a wealth tax�would raise �24bn a year in the UK, but why stop there � Tax Justice claims $2.1trn could be raised globally by�taxing the assets of the super-rich.�

The real question is: do they work?�Jean-Baptiste Colbert, famously declared that �the art of taxation consists in so plucking the goose as to obtain the largest possible number of feathers with the smallest possible amount of hissing.���

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Wealth taxes have been tried repeatedly in the past by many countries, and failed. All luxury and wealth taxes face the same barrier � valuing people�s �stuff�.� In countries where wealth taxes currently persist � such as Norway and Switzerland � they do so because they�re a substitute for capital gains and inheritance tax.��There is a balance that must be made against the backdrop of what the top bracket wealthy people in a jurisdiction make, and what they contribute back into society outside of a luxury taxes.�

As it happens, wealthier people already put up with high tax bills. A third of UK income tax comes from the 1%. The very wealthiest shoulder a historically high proportion of the tax burden. Analysis by the Institute of Fiscal Studies suggest the top 1% of earners contribute about 29% of all income tax, up from 25% in 2010 and 21% at the turn of the century.�As such, incremental increases in indirect taxes impacting a higher wealth bracket will only cause small amounts of pain, and if done correctly, not enough pain to cause them to leave the jurisdiction for a more tax favourable one.�In many cases, the wealthiest in society are also top employers and contribute significant economic benefits to Governments through direct and indirect taxes, spending, promotion and reputation.��

In a PWC study released on December 2023 the 100 largest listed companies in the UK contributed �90billion in taxes � representing 10% of Government tax income.��The October 2024 UK budget increased employer national insurance contributions, capital gains taxes, inheritance taxes, property taxes and more; these hit business owners the most. Further penalising those business owners with taxes on their perceived wealth could be the feather that causes the goose to honk in terms of convincing them that the numerous jurisdictions with better taxes, climates and business friendly governments.�

Indian born steel magnate Lakshmi Mittal is Britain�s seventh wealthiest person, according to the latest Sunday Times Rich List, and one of the country�s best known �non-domiciled� residents for tax purposes. In the past, he could shield his considerable overseas assets from UK income and capital gains taxes yet enjoy all the benefits of life in this country.�With the change in the tax regime, Mittal has now made it clear that is a step too far and he is �considering� leaving the UK.�Mittal is not the only one: in 2024, nearly 1,000 high net worth individuals from the UK relocated to Dubai, contributing to a broader trend of wealthy individuals moving to the United Arab Emirates (UAE). A London-based investment migration consultancy predicted that a total of 6,700 millionaires would move to the UAE by the end of the year, with a significant portion coming from the UK.�

At present, the only �net positive� of increased taxes aimed at the rich appears to be in press headlines rather than net tax revenue. Complex and onerous tax regimes often create the opposite result to what was intended.��However, it is unlikely that Governments are going to reverse the momentum anytime soon. The era of �tax the rich� is here already � and many governments believe that implementing such taxes will be net positive.��

Next week we are moving to chapter three of the State of Business Aviation 2025: The advice that AI wrote. �We explore the growing use of AI in professional services�particularly tax advice�and what can go wrong. While AI has speed and reach, it often lacks judgement, accountability, and precision. We share a real-world example where AI-generated advice almost led to a �10 million mistake. In an industry built on trust, the lesson is clear: advice still needs ‘skin in the game’.�