UK Regional Airports Face Massive Tax Hike; Will Air Fares Soon Soar?

Air passengers across the UK are being warned to prepare for higher ticket prices. Regional airports face “unprecedented” rises in property tax next year. This is due to a major overhaul of property valuations.

Analysis of official government data shows regional airports face some of the steepest business rate increases in the UK. While London hubs like Heathrow and Gatwick are also affected, the most extreme cases are outside the capital. These soaring tax bills are the result of the latest property revaluation by the Valuation Office Agency (VOA).

The Unprecedented Tax Shock

The Valuation Office Agency (Valuation Office Agency) is responsible for setting the rateable values for non-domestic properties. For the upcoming 2026 revaluation, the VOA changed its valuation guidance for major airports. It shifted from the Contractor's Basis to the Receipts and Expenditure (R&E) method. This new method values an airport based on its expected profitability.

Increased profitability following the COVID-19 recovery is the primary driver for the higher valuations. Global tax firm Ryan calculated that rateable values have jumped more than six-fold in some cases. The sector-wide uplift is an unprecedented 295 per cent.

Even with transitional relief, which limits initial increases, regional airports will still see large cash increases. Most airports are expected to see their bills more than double over the next three years. AirportsUK, the industry trade group, has warned the collective bill for the sector could increase by up to £900 million from April 2026.

Key Regional Airport Impacts

Specific regional airports are facing dramatic surges in their tax liabilities. Manchester Airport is among the worst affected. Its business rates bill is set to surge by £4.2 million to £18.1 million next year, according to Ryan's data.

Other major regional hubs face similar hikes. Bristol Airport will see a £1.2 million increase to £5.2 million. Birmingham International Airport expects a £1.8 million hike to £7.6 million. Newcastle International Airport is also in line for a significant increase to £1.1 million.

Impact on Passengers and Investment

Industry experts warn that airports cannot simply absorb a cost shock of this magnitude. Alex Probyn, a property tax leader at Ryan, stated the increases will flow through the system. This means higher airport charges, increased airline costs, and ultimately more expensive ticket prices for passengers.

Manchester Airports Group (MAG) has warned the increases will force a review of investment plans. MAG may have to look again at its commitment to invest more than £2 billion across its UK airports over the next five years. This impacts hard-working people and makes global trade harder for businesses.

AirportsUK has called the plans “short-sighted.” They warn of a knock-on effect for businesses dependent on airport connectivity. This risks negatively impacting local economies that rely on supply chains and tourism.

Industry and Regulatory Response

The industry is actively engaging with the government to address the issue. AirportsUK is working on a response to the Treasury's consultation on the business rates plan. They emphasize the importance of a long-term review into how airport business rates are calculated. This review is crucial to ensure a positive outcome that drives investment and economic growth.

• The change in VOA methodology to the R&E basis is the core reason for the massive hike.
• The total collective rates bill for the UK airport sector could rise by £900 million from April 2026.
• The cost will likely be passed to consumers, leading to higher air fares and fewer route choices.
• Major infrastructure investment plans, such as MAG's £2 billion commitment, are now under threat.

For more commercial aviation news and industry analysis, visit flying.flights.