Labour Prepares £1bn Stealth Tax on Family Holidays
22nd May 2026
Labour is planning a £1bn tax grab on family holidays even as Rachel Reeves unveils summer cost of living support for households.
HMRC officials are drawing up plans to impose VAT of 20pc on top of the fees that airports charge airlines to use their runways and terminals.
These fees are typically passed on to customers in full, meaning the move would heap more costs on holidaymakers and businesses. At Heathrow, the measures could add almost £5 to the current standard charge of about £24.
One airline industry insider said the Labour plan amounted to a “stealth tax” on families at a time when the cost of living crisis meant many people were already struggling to afford a holiday.
The Telegraph also understands that ministers are exploring the possibility of backdating the tax by as many as four years – the maximum permitted under current legislation.