"Exit tax" on founders axed, according to reports

A planned “exit tax“ on entrepreneurs who leave the UK has been dropped by the chancellor of the exchequer, according to reports.

Rachel Reeves had been said to be planning a 20 per cent tax on the British assets of wealthy founders leaving the country as part of this month’s Autumn Budget, as the government looked to plug a multi-billion pound hole in the country’s public finances.

The levy has now been axed amid concerns that founders would exit the country before the charge was implemented, according to a report in the Daily Telegraph.

A source close to the chancellor told the newspaper: “This is a pro-business government which is building on the progress we’ve already made to strengthen the UK’s position as an attractive investment prospect for the best and the brightest across the world.

“Introducing an exit charge would risk signalling that the UK is less welcoming to entrepreneurs and global talent, and that’s not something the chancellor wants to do.”

It said the chancellor was also concerned the levy would lead to founders abandoning plans to launch startups in Britain.

Dom Hallas, the CEO of the Startup Coalition, which campaigned for the planned tax to be dropped, said the U-turn had been “fully confirmed from folks in government” to him.

Earlier this week, the Startup Coalition published a letter signed by over 150 founders and investors calling for the planned tax to be halted, saying it would tell entrepreneurs that "their ideas and innovations aren’t welcome" in the UK.

Hallas added: “This has only been possible because of the startup community uniting with a clear voice about how detrimental it would be to the UK."

A report in the Times said that one government source said the levy was not likely to go ahead, although another said no final decision had been made.