UK tech leaders have urged the government to rule out an exit tax on founders in the Autumn Budget, as finance minister Rachel Reeves reportedly considers charging entrepreneurs leaving the country a 20% levy on British assets.
Reeves is facing big challenges in drawing up the budget on November 26, grappling with promises not to raise taxes on working people, limits on government borrowing and investment pledges.
Earlier this month, it was widely reported that Reeves was mulling taxing entrepreneurs on shares held in British assets.
It comes following $75bn fintech Revolut founder Nik Storonsky leaving the UK for Dubai earlier this year, alongside reports that others are considering moves to overseas destinations including Middle East and the US.
On Monday lobby group Startup Coalition published a letter signed by 150+ entrepreneurs and investors asking the Reeves to reconsider.
Signatories include energy startup Fuse founder Alan Chang, 20VC’s Harry Stebbings, Project Europe chief Kitty Mayo, AI fintech Cleo founder Barney Hussey-Yeo and Wise and Plural founder Taavet Hinrikus. VCs from Dawn Capital, Episode 1 and Notion Capital also signed.
The letter warns that “a potential exit tax would not only tell founders that their ideas and innovations aren't welcome, but that they should either get out early or not come at all.”
“The strength of feeling from founders of the UK’s most innovative businesses is clear, anything that punishes them for success instead of working to keep them growing, hiring and creating value in the UK will only serve to make things in the UK worse,” says Dom Hallas, executive director of Startup Coalition.
“To do this when founder confidence is as low as it is today would be sheer economic masochism.”
In late October, Startup Coalition and fellow lobby group Boardwave urged the government to avoid imposing new taxes in the tech sector and help boost investment.
“It can take UK firms twice as long as their US counterparts to scale-up from £10m to £100m [...] this budget should focus on closing that funding gap and giving founders and investors the confidence to build and scale their businesses in the UK over the medium and long term, not just their exciting start,” said Boardwave CEO Kath Easthope at the time.
