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Chancellor makes holidays more taxing

Discounts on combined insurance and holiday packages sold through the teacher unions could lose some of their appeal as a result of taxation changes.

In a little-publicised section of the November Budget statement, the Chancellor announced a rise in airport tax, which is added to the cost of air tickets and package holidays. From next November, people flying within the European Union will have to pay Pounds 10 and those travelling further afield Pounds 20 - double the current rates. The tax on travel insurance sold with holidays will also be going up in April, from 2.5 to 17.5 per cent.

The Association of Teachers and Lecturers Travel Club offers a 10-15 per cent discount to teachers who book their holiday and take out travel insurance through Travel Design Ltd, the company operating the club. But when the hike in insurance premium tax comes into effect, ATL members may find they are better off taking out separate cover and benefiting from the 8-13 per cent discounts on package holidays sold without insurance. The union's travel club is offering some other good deals, including up to 60 per cent off some international fares and 25 per cent off Apex fares to the USA.

Most teachers, however, take their holidays in Europe, according to Affiliated Travel Services, which runs travel clubs on behalf of the National Union of Teachers, the Secondary Heads Association, the lecturers' union, NATFHE, and the Educational Institute of Scotland. The company, which is part of the Teachers' Assurance Corporation, offers discounts on a sliding scale on most of the package holidays it sells, as well as 5 per cent off ferry and scheduled flight fares.

Thomas Cook Direct, which runs a travel service for the National Association of Schoolmasters Union of Women Teachers, guarantees discounts of at least 5 per cent on every booking. The NASUWT also has an arrangement with Travel Insurance Direct and claims that insurance bought from this company costs members up to 50 per cent less than comparable cover bought through high street travel agents.

Members of the Professional Association of Teachers can save money on their holidays by applying for a Beneficial Bank Visa Card which entitles them to join a travel club offering special rates on many holidays. For a small fee PAT members can also join the Spend and Save discount scheme and save up to 15 per cent on the cost of holidays and travel.

Discounts offered through the teacher unions may seem modest compared to some of the holiday bargains advertised in travel agents' windows. But these advertisements are often misleading. A recent survey by trading standards officers in Suffolk found inaccuracies in 42 per cent of agents' advertisements for last-minute holidays, with costs often far higher than those advertised.

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