An open letter signed by over 150 figures in the tech startup ecosystem has urged the chancellor to not include an exit tax in her upcoming budget.
Arranged by the Startup Coalition, the letter claims a tax on business owners moving their companies outside of the UK would “tell founders that their ideas and innovations aren’t welcome, but that they should either get out early or not come at all”.
The warning has come amid rumours that Chancellor Rachel Reeves (pictured) could impose a charge on high net worth figures fleeing the UK.
The letter claims that to achieve the government’s growth ambitions, the UK must work with entrepreneurs to ensure it is the best place to build new, successful companies.
“At a time when founders are being courted around the world, we should be building bridges, not walls,” the letter said.
“We should attract talent and capital, pool investment, and deliver policies that lower barriers and give globally minded founders every reason to build in the UK and scale to the world.”
Signatories of the letter include Beamery, Dexory, Fuse Energy, Daen Capital, 20VC and Notion Capital.
“We the undersigned urge the government to rule out an exit tax and focus instead on making the UK the most attractive place in the world to build and scale the next trillion dollar companies.”
Despite the concerns expressed by entrepreneurs weary of increasing their tax burdens, there have been calls from figures suggesting an exit tax could generate vital income for the Treasury whilst protecting the economy against those fleeing.
A report from 2024 from academics at the London School of Economics and the Centre for the Analysis of Taxation claimed the UK was behind its peers in Australia, Canada, the US, France, Germany and Japan by not charging some form of exit levy.
