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HMRC to defer Flybe tax liabilities


HMRC is to defer some of Flybe's tax liabilities as part of a last-ditch rescue deal, Sky News understands.

The struggling airline, which flys to 19 destinations from Cardiff Airport has averted collapse after reaching a deal with government that includes a tax holiday and the injection of tens of millions of pounds by its owners.

Sky News understands that HM Revenue & Customs (HMRC) agreed during talks on Tuesday to defer a substantial part of the regional airline's outstanding tax liability. The agreement - reached between Flybe parent Connect Airways and the government following hours of negotiations - will remove the immediate threat to 2,400 jobs at the Devon-based carrier.

Sources said that discussions about a government loan to Flybe were continuing and could take some time to finalise.

Ministers have also agreed to conduct a review of Britain's regional connectivity, overseen by officials at the Department for Transport, while the Chancellor, Sajid Javid, will examine reforms to the way that Air Passenger Duty (APD) is applied to domestic flights.

Confirming the deal, Andrea Leadsom, the business secretary, tweeted: "Delighted that we have reached agreement with Flybe's shareholders to keep the company operating, ensuring that UK regions remain connected.

"This will be welcome news for Flybe's staff, customers and creditors and we will continue the hard work to ensure a sustainable future."

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