Scotland’s curious air tax loophole that could save you almost £2,000

An air tax loophole means that flying via Inverness Airport can save passengers thousands of pounds on long-haul flights.

People flying to and from airports in the Scottish Highlands and Islands region don’t have to pay Air Passenger Duty (APD).

The exemption, nicknamed the “Inverness Immunity,” was introduced in 2000 to improve connectivity and boost business opportunities in northern Scotland.

However, given the high cost of APD, with further rises announced in the autumn Budget, the potential for saving money by flying from Inverness is greater than ever. The tax currently adds up to £92 on a long-haul fare, or £202 for those flying in premium seats, and will rise to £106 and at least £236, respectively, in 2025.

Here’s everything you need to know about the Inverness air tax loophole and whether it’s something worth pursuing when booking your next long-haul flight.

What is Air Passenger Duty?

APD is a departure tax. Anyone flying on a domestic or international flight from the UK must pay it. Many passengers will be unaware of APD as it is automatically added to the cost of your ticket. But it can represent a significant chunk of your ticket price (£13 for a short-haul international flight, for example) and is set to rise further after the Budget.

How much money can you save by starting a journey from Inverness?

The savings are marginal on economy tickets, but start to rack up when you look at the cost of premium-economy or business-class seats.

The Telegraph found that return British Airways flights from Heathrow to Cape Town in late March started from £1,702 for a premium-economy ticket. However, flying from Inverness to Cape Town, connecting onto those exact same flights at Heathrow, starts from £1,574. For a family of four that amounts to a saving of £512.

We found similar savings on flights to Singapore (£149 per head, or £596 for a family of four). We also found one British Airways flight to Melbourne, where starting a trip from Inverness in premium-economy seats via Heathrow saved £474 per ticket compared to booking from Heathrow (saving £1,896 for a family of four).

Great! So how do I get to Inverness?

Here’s the catch. Even if you live in Scotland, to utilise the Inverness loophole you would likely need to board a lengthy and costly train – around three and a half hours from either Glasgow or Edinburgh.

For the rest of the UK, exposing the loophole would involve a very long drive, a very long train journey, or more likely – a short flight. Once you factor in the cost of booking return flights up to Inverness, the savings become less impressive: typical return domestic flight tickets to Inverness vary from between £50 to £100.

Flights to Inverness are also sporadic and may not match up with your departure time. And Inverness only has domestic departures to and from London (Gatwick, Luton and Heathrow), Manchester, Belfast and Bristol, meaning that the loophole will not be viable for much of the population.

Is Inverness the only airport affected by the loophole?

No. There are a number of airports in the Highlands and Islands area where passengers do not have to pay APD. These are: Barra, Benbecula, Campbeltown, Dundee, Inverness, Islay, Kirkwall, Stornoway, Sumburgh, Tiree and Wick. However, while there are occasional flights from Dundee to Heathrow or Campbeltown to Glasgow, only Inverness has a sufficient departures board for the loophole to be practically exploited.

Can I just book from Inverness but join the flight at Heathrow?

Alas, no. There is no option to miss the Inverness to Heathrow leg of your flight and to join the journey at Heathrow, because if you fail to show up for a flight at the point of origin your entire ticket will automatically be cancelled.

Can I hop off at Heathrow on the way back?

Not if you have check-in luggage. But if you’re travelling light you could (hypothetically) leave the airport at Heathrow, though you should inform your airline of this decision so that they aren’t waiting for you on the final leg of the flight up to Inverness.

This doesn’t sound good for the climate

Good point. It is widely agreed that the global population should be trying to reduce, not increase, the amount of time spent on aeroplanes – particularly if it’s in the pursuit of making nominal financial savings.

Why doesn’t Labour just end the loophole?

A Highlands and Islands Airports Limited spokesman explained: “The Air Passenger Duty Relief for the Highlands is crucial to supporting connectivity for our remote communities, who rely heavily on flights for everyday necessities such as hospital appointments. The lack of road and rail connections to and from the region mean that flying is vital to the businesses and people who live and work here.”

So should I bother trying to seek Inverness Immunity?

Probably not. With a few exceptions on particularly long journeys, the savings are low for the hassle of getting up to Inverness. And, from a climate perspective, it is morally questionable to spend superfluous hours in the sky in this manner.

However, if you are still tempted, one smart way to maximise the loophole would be to spend a longer period of time in the Inverness region before or after your international flight. Inverness itself is a lively town, and within an hour or two of the airport you will be deep into the beautiful countryside of the Scottish Highlands.