In a boost for the UK’s space industry an exemption has been created from Insurance Premium Tax for UK spacecraft operators. The change came into force on 1 December 2014, exempting contracts of insurance that cover risks relating to the operation of spacecraft during launch, orbit, flight or re-entry.
Previously an insurance policy relating to spacecraft was liable to IPT at the standard rate of six per cent. After consulting with the UK space industry and receiving representation concerning the negative impact of IPT, the Government introduced the exemption. Not only will this new measure make satellite operation cheaper and more accessible to UK spacecraft operators but it will play an important role in attracting more businesses involved in the spacecraft industry to the UK. It will also bring insurance for the spacecraft industry into line with the other existing IPT exemptions for commercial aircraft and shipping, which are similarly internationally competitive.