The spectre of an 'exit tax', levied on individuals departing the UK, has ignited concerns among business leaders that it could precipitate a mass exodus of wealth creators from Britain. Entrepreneurs are warning that such a charge, which would apply capital gains tax to those permanently leaving the country, could have devastating consequences for the economy.
Valued at over £800 million last year, fintech company Cleo's founder Barney Hussey-Yeo has urged Andy Burnham, the newly elected Labour MP for Makerfield, to rule out the 'exit tax' with immediate effect. The US already levies a similar tax on departing citizens, and Mr Hussey-Yoe warned that introducing such a policy would be 'devastating for the UK economy'.
The renewed focus on potential tax increases comes as Labour's spending commitments, including nationalising utility firms and compensating WASPI women, have intensified scrutiny over how these expensive promises will be funded. Andy Burnham has committed to Shadow Chancellor Rachel Reeves' fiscal rules aimed at reducing government borrowing, but entrepreneurs are now pressing for clarity on which sectors would remain exempt from new taxation.
Start-up network Helm's Chief Executive Andreas Adamides highlighted the significant stakes for founders, stating that imposing more pressure 'would cause so much pain'. Leaders of Britain's technology 'unicorns' previously wrote to Ms Reeves warning that an exit tax would undermine confidence in the UK and potentially force them abroad. Last summer, Tax Policy Associates founder Dan Neidle warned against tax speculation, noting it had already prompted some entrepreneurs to leave the UK.
When asked if he would rule out such taxes, a spokesperson for Mr Burnham stated they would not comment on speculation or 'write tax policy off the cuff'.