How to Avoid High Taxes on Your Next Avios Redemption

May 4, 2019

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British Airways Avios is a popular points currency — especially for UK residents. And, the currency can be very valuable to redeem for some great flight awards, particularly for long-haul premium cabin travel.

There are two issues you will encounter in redeeming your Avios in this way though, especially if your Avios are in your British Airways Executive Club account:

  • Depending on the airline with which you’re flying, there may be significant fuel surcharges applied to your redemption; and
  • If you are departing the UK on a long-haul premium flight, you will be hit with the additional Air Passenger Duty Tax, which can be as much as £194 per person.

But there are some tricks for reducing these two additional charges and getting the best value from your Avios.

Reducing Fuel Surcharges

There’s a neat trick to book British Airways flights with much lower fees and surcharges. You can move your Avios from Executive Club to Iberia Plus and book the same flights with much lower fees and taxes.

Consider a London to New York return business-class redemption. On BA flights booked through Executive Club, it would cost the following:

That’s a sizable amount of both Avios and fees and taxes.

If you were to move your Avios to Iberia Plus and fly Iberia rather than British Airways on the outbound, departing from Madrid and returning via London flying British Airways, you would receive a small Avios discount and a big fees and taxes discount for travel in the same class on the same dates:

It becomes even cheaper in both Avios and fees and taxes if you fly only Iberia both ways just on Madrid to New York return (and make your own way to and from Madrid and London):

The same trick works for Aer Lingus redemptions from Ireland.

Iberia A330 Business Class. Photo by Benji Stawski / The Points Guy
Iberia A330 business class. (Photo by Benji Stawski / The Points Guy.)

Avoiding the Air Passenger Duty

A great way to avoid this additional tax is to commence your trip outside the UK. You can still fly via the UK if you wish to fly British Airways, but by simply adding a non-UK flight to the start of your redemption, the APD tax will not be payable.

For example, you may be looking at a British Airways Club World redemption from London to Singapore. This would incur the APD tax. But if you added a short Brussels to London flight as part of your redemption (so Brussels to London to Singapore), the APD Tax is no longer payable because your journey did not commence in the UK.

You would need to factor in the additional time and cost of getting to Brussels, which is easy and quick on the Eurostar. You’d also need to factor in that the additional Brussels to London flight would increase the cost of your redemption slightly because British Airways charges for redemptions on a per-flight basis.

An economy redemption on the super-short Brussels to London leg can be made for as little as 4,000 Avios + £17.50 as a Reward Fare Saver, and this saves you more than £150 in APD tax.

You will also need to build in a buffer if you are positioning to somewhere in Europe to then commence your journey back to London in order to use this trick.

Remember also that if you commence your flight in a hub city of a partner airline, like Madrid for Aer Lingus, Helsinki for Finnair or Dublin for Aer Lingus, that airline might fly the route as well. If that is the case and there is award availability, you will skip the APD by avoiding London completely.

The APD is not applicable on flights to London (only from London), so if you are booking Singapore to London, you do not need to add on a final European leg to reduce any taxes.

Featured image by Nicky Kelvin / The Points Guy

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