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Stuffed #3: How British Airways closed off low-tax Avios loopholes last week

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We’ve now had time to digest the changes to long haul Avios pricing launched last Wednesday.

As more examples come to light, it is clear that this is a major devaluation.

It has been disguised by giving a (roughly) 15% discount to UK members who use a ‘new style’ Amex 2-4-1 voucher and who can afford to use the maximum number of Avios. Strip these people out and there are some serious underlying issues.

On Friday, we looked at how Avios members outside the UK and US now need 45% to 60%, and up to 92% in some cases, more points – with no saving in taxes. On Monday we looked at how holders of ‘old style’ BA Amex 2-4-1 vouchers now need 45%-60% more Avios.

How BA closed off low-tax Avios loopholes last week

Today we’re going to look at how BA closed off various low tax loopholes – and, where it couldn’t, it simply whacked up the Avios required instead.

Before we get into this, you need to understand one point. Everything else follows from this.

Before last week, the cash element of an Avios redemption directly reflected Government taxes, fees and BA surcharges. There was an exact breakdown of each element available.

Today, the Reward Flight Saver fee is meant to approximately repay British Airways for the Government taxes, fees and BA surcharges. It is NOT based on the ACTUAL taxes and charges incurred – it is just a rough and ready number which replaces them.

You will see why this makes a difference.

How BA closed off low-tax Avios loopholes last week

Example 1: the end of low tax redemptions from Inverness and Jersey

Jersey (because it is outside the UK for tax purposes, but inside the UK for BA purposes) and Inverness (because it has special status) are exempt from Air Passenger Duty, even when connecting to a long haul flight in London.

This is a big saving. From April 2023, long haul Business Class Air Passenger Duty will be £191 or £200 per person, depending on distance. A family of four could have saved up to £800 if they started their Avios redemption in Inverness.

(Obviously this was easier said than done for most people, but it is a sum which focuses the mind.)

This saving has now gone away because the Reward Flight Saver fee does NOT actually represent the actual tax and charges paid any longer.

Here’s an example:

Inverness to New York in Club World last week:

  • 120,000 Avios plus £695 taxes and charges per person (peak date)

Inverness to New York in Club World today:

  • 120,000 Avios plus £850 taxes and charges per person (peak date)

The cost of this flight has gone up by £155, because BA is no longer charging you the actual taxes and charges, which are lower from Inverness.

Other cash and Avios mixes are available but I’ve used 120,000 Avios for easy comparison.

The same applies to redemptions from Jersey.

How BA closed off low-tax Avios loopholes last week

Example 2: the end of low tax redemptions from Dublin and other EU starting points

Back in September 2021, British Airways and American Express unveiled a new benefit for the 2-4-1 companion voucher on the Premium Plus credit card.

You could now start your trip outside the UK.

One reason for this was to allow people to book one way flights home, if they had travelled out on a cash ticket or a non-BA reward ticket.

The other reason, which may or may not have been deliberate, was to allow you to start your 2-4-1 redemption from Dublin, Amsterdam or another EU starting point. This not only let you drop the Air Passenger Duty but also let you benefit from lower BA surcharges.

Here is an example using data from this article in March using the ‘most Avios, least cash’ option:

Dublin to New York in Club World in March 2022:

  • 152,500 Avios plus £288 taxes and charges per person (peak date)

Dublin to New York in Club World in December 2022:

  • 212,500 Avios plus £293 taxes and charges per person (peak date)

or, to match the old Avios requirement more closely:

  • 146,500 Avios plus £817 taxes and charges per person (peak date)

This is a ludicrous devaluation, irrespective of which of the two December 2022 options you use as a comparison.

How BA closed off low-tax Avios loopholes last week

Example 3: increasing Avios requirements where the law stops you increasing the cash rate

In Hong Kong and Brazil, local regulations forbid flights tickets from including any sort of ‘fake’ charges. (In theory the Hong Kong rule has gone, but British Airways still acts like it hasn’t so there may be some small print we don’t know about.)

This doesn’t impact you if you book a return from London, since the ticket is issued in the UK. Book a one-way flight from Hong Kong or Sao Paulo, however, and nothing can be added on.

The rules meant that British Airways couldn’t implement Reward Flight Saver from Hong Kong or Brazil.

Surely the pricing should therefore be unchanged from last week? No. Since it couldn’t increase the charges, British Airways just increased the Avios required instead.

Hong Kong to London, Club World, one way off-peak

  • Last week: 75,000 Avios + £38
  • Today: 100,000 Avios + £38

Sao Paulo to London, Club World, one way off-peak:

  • Last week: 75,000 Avios + £8
  • Today: 100,000 Avios + £8

Note that you need to call BA to book São Paulo for the lower taxes level as the website reprices when you come to the payment screen. Alternatively, book via the avios.com platform if you have an Aer Lingus AerClub or Vueling Club account.

In further parts of this series, we’ll look at the impact of the Avios devaluation on holders of Barclays Upgrade Vouchers and – bizarrely – how BA chose to wreck the Gold Upgrade Vouchers given to higher earning Gold and all Gold Guest List members of Executive Club.


HFP-Barclaycard-Avios-Card

How to earn Avios from UK credit cards (February 2023)

As a reminder, there are various ways of earning Avios points from UK credit cards.  Many cards also have generous sign-up bonuses!

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

25,000 Avios for signing up and an upgrade voucher for spending £10,000 Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher for spending £20,000 Read our full review

There are two official British Airways American Express cards with attractive sign-up bonuses:

SPECIAL OFFER: Until 21st February 2023, the sign-up bonus on the British Airways Premium Plus American Express card is increased to 35,000 Avios from 25,000 Avios. You can apply here.

British Airways American Express Premium Plus

35,000 Avios (ONLY to 21st February) and the famous annual 2-4-1 voucher Read our full review

British Airways American Express

5,000 Avios for signing up and an Economy 2-4-1 voucher for spending £12,000 Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points.

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review

The Platinum Card from American Express

30,000 points and unbeatable travel benefits – for a fee Read our full review

Run your own business?

We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,500 Avios.

Capital On Tap Business Rewards Visa

Get a 10,000 points bonus plus an extra 500 points for our readers Read our full review

You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus.

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.

American Express Business Platinum

40,000 points sign-up bonus and a £200 Amex Travel credit every year Read our full review

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.

Comments (178)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Joshua says:

    Interesting to see how a certain Gilbert O on another place who has clearly drunk the full BA kool aide, and repeated it, has lost credibility and antagonised his clearly more analytical (than him) readership.
    Great to see objective analysis on HfP.

  • Kevin says:

    Story of my life. Always late to the party. I only jumped onto the Avios bandwagon in 2020 and its Goodnight Vienna already, having only flown a reward flight once! My Amex Platinum and Marriot Bonvoy Amex can come out of hibernation. At least that way I’ve more options.

  • Dwadda says:

    Well, I achieved both TK Gold and SQ Gold in 2022. Star Alliance is actually pretty good. It is unavoidable that I will continue to be BA Gold, but Oneworld no longer gets the bulk of my business. You cannot bicker considering the pain BA and its employees have endured. But the ‘marriage’ with BA is definitely over.

  • JW says:

    Unless I’m missing something, All regional add on flights are now much cheaper 🙂

    I fly from EDI > LON > USA

    I got the flight from EDI to LON avios free but had to pay for the taxes etc at £120 or so. Now I get those free (or built into the reward flight saver.)

    So for my family of four, thats a £500 saving and no need to head up to inverness to get it.

    I think*

    • Rob says:

      Sounds out – there simply are no taxes of that scale. In fact charges may be lower aa Heathrow charges less to connecting passengers and that would mainly offset EDI charges.

    • Scott says:

      It wasn’t as much as £120, but yes the surcharges previously were higher from e.g. GLA, whereas the connection is now genuinely free.

  • Steve in Croydon says:

    I’ve just had an unbelievable email from RFF ( I don’t subscribe, just get emails). The headline is “Epic News from BA”.
    Further on it says “British Airways has made some fabulous changes to Companion Vouchers and Reward Flight Savers”.
    Has RFF actually looked at the detail of this daylight bank raid by BA?!?! Obviously not, just click-bait for their “service”.
    I’m just about to get my Barclays £10k upgrade voucher, which it seems will now be worth SFA! As soon as it triggers in January it will be bye-bye to the Avios Plus Barclaycard and £20pm.
    My PLAX card is the way forward with much more flexible MR points. Time to burn the Avios and bail out after nearly 30 years (Australia/RTW already booked for next year).
    I flew LHR-DFW A380 First return a couple of weeks ago. I must say all very uninspiring – the seats are not as comfortable as other BA First seats, the meal options were so-so. The cabin immediately struck me as akin to an industrial locker room with those huge cupboards. The CCR was OK for breakfast. The crews were great fun. I picked-up 32k Avios on the trip for £2k in their sale. In the future what will I get – £5k Avios? No thanks.

  • SteveBexhill says:

    Did I benefit or not? We booked LGW to PUJ Dom Republic 9-16 Sept 2023 in economy just before BA changed the RFS scheme. Why, because the Avios needed was varying nearly every hour on 5 Dec, one minute max 42,500 + approx £650, then varying between 60,000 – 80,000 Avios + just £300, crazy!
    Booked at 70,000 + £300 using 241 voucher. As we accumulate quite a few Avios each year I was ok doing the extra Avios with less cash, but what would this flight cost now, did we get a good deal? As I’ve not a lot of Avios left I cant see what they’d charge now, is there a way around this to see what I’d need?

  • Jonathan Price says:

    This makes me wonder if I would be better off leaving the BA Amex Avios world completely and switching entirely to the Virgin/KLM/Air France world. I barely make enough spend to reach the companion voucher on both, and should perhaps concentrate on Virgin. What do you think? I live in the UK and use the vouchers for my long haul holidays.

    • Rob says:

      I think this will become clearer when the redemption chart for SkyTeam partners is published in Jan/Feb, assuming they still join SkyTeam in Jan as planned.

  • Sunil says:

    Seems to have increased the pounds to be paid even for Economy. From South India airport to London off-peak was 16250 +175 GBP. Now it is 16250 + 203.05 GBP or 23k+ 140 GBP or 30K + 75GBP. Thanks for highlighting this and now I will be mr.Amex amongst friends to earn few avios

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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