“There is an increase in tax on the way based upon how HMRC are
treating the frequent flyer programme involving British Airways Avios points
system. The points could be taxed for the first time as HMRC launches a raid on
the popular frequent flyer programme. It is not immediately clear whether HMRC
plan to claim VAT on all Avios collections, since air miles are not typically
Holiday makers could face additional tax in this new development. We are watching developments closely.
- Holiday makers buying extra British Airways Avios points are at risk of being taxed for the first time.
- Tax officials have informed IAG who are BA’s parent company that it is reviewing how VAT is charged on Avios points.
- The points are exempt from sales charged as air miles.
- Most points are awarded as a reward for either flying with British Airways or spending on a BA branded credit card.