Executives from some of Britain’s most valuable technology start-ups have delivered a bombshell warning to Rachel Reeves that tax-raising measures in this month’s budget could force them to cancel plans to list their companies on the London Stock Exchange.
Sky News has obtained a letter sent this week by companies including Revolut, Funding Circle, OakNorth, Clearscore and Quantexa urging the chancellor not to impose an exit tax on wealthy individuals or take other decisions “which will result in reduced confidence or hesitant investment in the UK”.
In total, the signatories to the letter run companies collectively valued at well over $100bn.
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Many of them are among the most prized listing candidates for the UK equity markets at a time when a brief flurry of newly floated candidates has done little to allay concerns about London’s international attractiveness against rival financial centres such as New York and Amsterdam.
They said, though, that Ms Reeves must consider “how any potential changes to the fiscal environment could stand to make the UK less attractive to existing and potential founder – which will result in reduced investment in UK start-ups and reduced innovation; will hinder efforts at driving growth; and may also delay or result in cancellation of companies’ plans to IPO [list their shares publicly] in the UK”.
Their letter, which was sent under the aegis of the trade body Innovate Finance’s Unicorn Council for UK FinTech, called on the chancellor to demonstrate support for Britain’s fintech industry and the wider economy by reversing changes to capital gains tax and inheritance tax rules.
“Recent changes… have made the UK less attractive to entrepreneurs seeking to start a new business, and to the highly skilled talent that will help drive these startups.
It cited the reduction in the lifetime limit for Business Asset Disposal Relief from £10m to £1m as a factor in…
