UK technology leaders and investors are urging Chancellor Rachel Reeves to scrap a proposed exit tax on entrepreneurs, warning it would undermine competitiveness and deter investment. Reports suggest the Autumn Budget on November 26 could include a 20 percent levy on business assets held in Britain by founders who move abroad. Critics argue the measure would send an unwelcoming signal to innovators at a time when founder confidence is already fragile.
Background
The debate intensified after Revolut cofounder Nik Storonsky relocated to Dubai earlier this year, with other founders reportedly weighing moves to the Middle East and the United States. Media briefings indicate the Treasury is exploring a “settling-up charge” that could raise about £2 billion, framed as a way to plug fiscal gaps without lifting headline taxes on workers. Reeves faces pressure from borrowing limits, investment pledges, and previous commitments not to raise taxes on working people.
Industry Response
Startup Coalition published an open letter signed by more than 150 entrepreneurs and investors urging the government to rule out the plan. Signatories include Fuse founder Alan Chang, 20VC’s Harry Stebbings, Project Europe’s Kitty Mayo, Cleo founder Barney Hussey-Yeo, and Taavet Hinrikus of Wise and Plural, alongside partners from Dawn Capital, Episode 1, and Notion Capital. The letter warns that an exit tax would tell founders that their ideas are not welcome and risks pushing them to leave sooner or avoid the UK altogether.
Lobby Groups and Scaling Concerns
Dom Hallas, executive director of Startup Coalition, said punishing founders for success would weaken growth, hiring, and value creation in the UK. Boardwave previously urged the government to avoid new tech taxes and to focus on improving scale-up pathways. Its CEO Kath Easthope noted it can take UK firms twice as long as their US peers to grow from £10 million to £100 million in revenue, and she called for measures that close funding gaps and build long-term confidence.
Wealth Industry and Investor Backlash
Wealth managers also condemned the proposal, labeling it reckless and self-defeating. deVere Group CEO Nigel Green said the policy would inflict lasting damage on competitiveness and accelerate the exodus of entrepreneurs and investors who already feel punished for success. He placed the idea alongside the abolition of the non-dom regime, higher corporate taxes, and a historically high personal tax burden as a cumulative hit to confidence.
Political Reaction and Market Behavior
The plan drew fire from Conservative figures, with Shadow Justice Secretary Robert Jenrick calling it a crazy idea that would spur wealth creators to sprint for the door. Industry specialists warned that even floating the proposal could trigger behavioral responses, prompting early departures or restructuring before any law takes effect. Marc Acheson of Utmost Wealth Solutions said the UK risks further eroding its appeal to global entrepreneurs and high earners who contribute outsized tax receipts.
Potential Impact and Strategic Choices
Supporters of a tougher stance argue that high-net-worth mobility complicates fair taxation and that a targeted charge could protect the tax base. Opponents counter that the measure would shrink the base by discouraging investment, reducing future revenues from growth companies, and weakening the broader ecosystem. For internationally mobile founders, advisers say the discussion alone introduces uncertainty that could accelerate reviews of residency, succession planning, and cross-border structures.
With the Autumn Budget approaching, the government faces a stark trade-off between short-term revenue options and long-term competitiveness. Tech founders, venture investors, and wealth professionals are united in warning that an exit tax would backfire by pushing talent and capital away. Whether the Treasury abandons the idea or presses ahead will signal how the UK intends to balance fiscal constraints with its ambition to remain a global hub for innovation.