More than 150 business owners and investors have signed an open letter warning chancellor Rachel Reeves to not introduce a capital gains exit tax on entrepreneurs leaving the UK.
There are rumours that a charge for high net worth business owners who have built businesses in the UK but then move to another country will be included in the Autumn Budget on 26 November.
Under current rules, emigrants who sell their British assets after leaving the country are not liability for capital gains tax.
According to The Times, a new “settling up charge” would raise around £2 billion.
Other countries, including all those in the G7 apart from Japan, have an exit tax.
But a letter organised by Startup Coalition warns that “a potential exit tax would not only tell founders that their ideas and innovations aren’t welcome, but that they should either get out early or not come at all”.
It continues: “We share the government’s ambition for growth and sound public finances. Progress on these will only be achieved by making the UK the best place to scale the next generation of global companies, not by punishing those who choose to leave.
“At a time when founders are being courted around the world, we should be building bridges, not walls. 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.”
Over 150 entrepreneurs and investors have signed the open letter, which Startup Coalition’s Dom Hallas said includes those representing more than £10 billion in UK economic value, such as the people behind Beamery, Dexory, Cleo, Improbable and Fuse Energy, and funds like Dawn Capital, 20VC, Mosaic Ventures and Notion Capital.