Over half of entrepreneurs may leave Britain if Labour raises Capital Gains Tax
The poll, conducted among 154 members, suggests that many business owners would consider relocating if Labour raises CGT from the current 20% to align it with income tax, which could see higher-rate taxpayers facing a 45% levy.
Helm’s members, who are founders of companies with an average turnover of £21 million, collectively generate over £8 billion in revenue. This reflects only a fraction of the UK’s broader small and medium-sized enterprises (SMEs), which represent 99.9% of all businesses in the country, with a combined turnover of £2.4 trillion in 2023.
If the sentiments expressed by Helm’s entrepreneurs are echoed across the wider business community, such a tax hike could have devastating consequences for the UK economy, potentially outweighing any benefits and putting the country at risk of severe financial strain.
CEO of Helm Andreas Adamides said: “The results of this poll have been astonishing, showing the highest response rate we’ve ever seen.
“Entrepreneurs are the lifeblood of Britain. Our poll underscores a crucial point: that if Labour aims to support innovation and growth, they must consider the impact of increasing capital gains tax, which could stifle the very spirit that drives our economy. Many entrepreneurs are already relocating to countries like Portugal, known for its tech scene. Ignoring the impact of Capital Gains Tax could significantly reduce tax revenue and harm the future of British entrepreneurship.”
CGT expert Nimesh Shah, CEO, of Blick Rothenberg, said: “It is not surprising that so many entrepreneurs are considering their future in the UK, given the very dark picture presented by Keir Starmer and Rachel Reeves, and a clear signpost that capital gains tax rates will be increased.
“Entrepreneurs are concerned that rates could be aligned to income tax, up to 45%, makes investing less attractive. The delta of 0% tax, if you leave the UK, to facing a rate of 45% in the UK is a strong incentive to leave. Most entrepreneurs find the current 20% rate fair, and a large increase could reduce tax revenue, with HMRC projecting a £3.4 billion loss over three years from a 10% hike.”
2024-09-10
