The spin machine in Downing Street has been putting out MSM briefings on raising taxes and “black holes” for a few months now. The general mood music is that Capital Gains Tax will rise substantially in the next Budget, which is due at the end of October. But will this have a serious effect on the insurtech and general start-up sector? This survey suggests that it will, but hey, maybe Labour wants all the people who can make things happen to pack up and leave, so that a nation of State supplicants is all that remains?
Six-in-ten members of Helm, Britain’s largest and longest established entrepreneur network said they would consider leaving the UK to avoid a Capital Gains Tax (CGT) increase. Some 60% of 154 members polled by founder business network Helm said they are looking into relocation if Labour increases CGT for entrepreneurs selling their businesses. Labour is considering raising CGT from 20% to pegging it to income tax meaning a higher rate tax payer would pay 45%.
Helm members are founders of businesses with an average turnover of £21 million alone. The combined turnover of the 400 Helm members’ businesses is more than £8 billion. However Britain’s SMEs make up 99.9% of all Britain’s businesses with a combined turnover of £2.4 trillion in 2023 If the results from the Helm survey were mirrored across the country it would not just wipe out any gain but bankrupt Britain.
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 £3.4bn loss over three years from a 10% hike.”
For more information visit: https://www.helmclub.co/
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