Air passenger duty has been increased in the Budget, meaning that holidaymakers could find themselves shelling out more in order to travel by air.

In her statement, Chancellor Rachel Reeves announced a hike on charges on passenger air travel, increasing the duty by £2 a trip for short haul economy flights.

Under Labour's new rules, passengers on these flights will pay £17 in tax for short-haul flights abroad from 2026, increasing by £4 in total including increases inherited from the Conservatives.

Currently, those in economy pay £13 for flights to Europe and North Africa or £7 for domestic flights.

The increase will not come into effect until the 2026/2027 tax year. 

Under previous Tory plans, the duty was set to rise by £2 in April next year, with premium passengers paying as much as £224 for long-haul flights.

The Government said the increase was to ensure that revenues from the duty 'remain sustainable'.

Mark Tanzer, Chief Executive of ABTA – The Travel Association said: 'While a £2 increase might not sound much, it brings UK air tax on economy flights to £15 per person, per flight. UK travellers already pay more on air tax than most other countries, and it is one of a multitude of taxes and charges people often have to pay on their holidays.

'The UK already charges the highest rate of APD in Europe. The Office for Budgetary Responsibility notes that APD is amongst the fastest growing of all taxes in the UK. The government must keep a close eye on the overall cost of travel to ensure that hard-earned holidays remain within reach.'

Ahead of the Budget, a rumoured hike was dubbed a 'holiday tax', and there was a flurry of flight bookings as Britons looked to avoid the incoming tax.

However, the real increase will come to those flying on private jets.

Reeves said the duty for passengers on private flight will be increased by 50 per cent.

This, Reeves said, equates to £450 per passenger on a private jet to California, mocking former Prime Minister Rishi Sunak, who is expected to be offered a job in the US.

The Government also announced it would consult on extending the higher rate to include more private jets.

For planes equipped to carry fewer than 19 passengers, passengers flying long haul can currently expect to pay £607.

No change was announced for business class flights, with passengers currently required to pay £14 for domestic flights and up to £202 for international flights.

These figures came into effect back in April, having risen from £13 and £202 respectively.

The increase in the tax comes as part of the Government's bid to fill what it says is a £22billion 'black hole' in the UK's finances. Prime Minister Keir Starmer previously warned that the Budget would be 'painful'.