Is There VAT on Flights?

Air travel is a major part of business and personal life in the UK, but when reviewing flight costs or handling travel expenses, many wonder whether Value Added Tax (VAT) is included. In most cases, the answer is simple: there is no VAT charged on flights. However, as with many areas of UK tax, there are nuances and exceptions worth understanding.

This guide explains how VAT applies to flights, how HMRC treats air passenger transport, and when VAT might be involved in related travel services.

What VAT Is Charged on Flights in the UK?

Flights in the UK, whether domestic or international, are zero-rated for VAT. This means they are VAT-taxable supplies but charged at 0%. The key difference between zero-rated and VAT-exempt services is that zero-rated suppliers can still reclaim input VAT on business costs.

So if you're booking a flight from London to Manchester, or even from London to New York, the ticket price will include zero-rated VAT. There is no 20% VAT added to the fare, even though the airline can still claim back VAT on certain business expenses.

How Does VAT Work in the UK?

The UK has three main VAT rates:

• Standard rate (20%) – applies to most goods and services

• Reduced rate (5%) – applies to some items like domestic energy

• Zero rate (0%) – applies to essentials such as most food, children’s clothes, books, and passenger transport including flights

Zero-rated services must still be accounted for on VAT returns if you’re a business. Airlines can usually recover VAT on costs like maintenance and aircraft services, but the ticket prices charged to passengers do not include VAT.

HMRC’s Treatment of Passenger Transport for VAT

HMRC zero-rates passenger transport where the transport is from one place in the UK to another, or between the UK and another country, provided the transport is by:

• Aircraft

• Train

• Bus or coach

• Ferry or ship

The transport must be publicly available and scheduled or chartered. Flights fall firmly under this category, so ticket sales to passengers are zero-rated.

Are There Any Exceptions?

Yes, although flights themselves are zero-rated, there are a few instances where VAT can be involved indirectly:

• Flight-related services, such as in-flight meals sold on domestic flights, airport lounge access, or seat upgrades, may carry VAT if provided separately.

• Travel agency fees, booking services or admin charges might include standard-rated VAT if not part of the flight ticket.

• Private air charter services for business or leisure may also carry VAT if not used for public scheduled transport.

• Ancillary goods and services sold alongside flights – for example, travel insurance or hotel bookings – may be VAT-liable depending on how the service is bundled or invoiced.

So while your flight ticket is usually zero-rated, always check the breakdown of charges for any added extras.

Scenarios Where VAT May Apply

If a business is reclaiming VAT on employee travel expenses, it’s important to understand that VAT cannot be reclaimed on zero-rated travel, such as commercial flights. However, if a travel agent adds a separate booking fee, and it includes VAT, that portion may be reclaimable.

If a business hires a private aircraft for corporate travel, VAT may be charged unless the flight qualifies for zero-rating (for example, if it transports passengers on a qualifying route).

Can You Claim VAT Back on Flights?

No, because there is no VAT charged on the ticket, there’s nothing to reclaim. Even though flights are a VAT-taxable supply, the rate is 0%, so no VAT is added to the fare.

This is different from other travel services like hotels or taxis, where VAT is often charged and can be reclaimed if the cost relates to business.

Final Thoughts

In the UK, flights are treated as zero-rated for VAT, so whether you're flying domestically or internationally, your ticket price won’t include VAT. That means there's nothing to reclaim, but airlines can still recover VAT on some of their own costs.

While most people won’t encounter VAT on flight tickets, related services or travel arrangements might involve VAT, especially if booked through an agent or as part of a package. If you're managing business expenses or travel arrangements, understanding where VAT does and doesn’t apply will help you keep records accurate and avoid reclaim errors.