An Open Letter to the Chancellor

Dear Rachel,

The UK’s startup and scaleup ecosystem has gone from strength to strength over the past fifteen years. It is a success built on openness and competitiveness, and on encouraging not just fantastic British founders but attracting amazing entrepreneurs from around the world to build here in Britain.

Today, so many of those founders have turned their ideas into global companies that employ Brits, pay tax and provide products, services and innovations that improve our lives. 

Ahead of the budget, rumours of an ‘exit tax’ for entrepreneurs leaving the UK put this success at risk. Put simply, 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. 

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.

This is not to say that founders are not willing to play their part, indeed they are. The rises in Capital Gains Tax, the tapering off of Business Asset Disposal Relief, and the changes to the tax treatment of venture capital have been painful burdens that our ecosystem has shouldered in the past year, in addition to the wider taxation on business. We should be under no illusions that these changes have made global tech founders and investors question the competitiveness of the UK. Instead of rebuilding trust with entrepreneurs, a potential exit tax sends the opposite message: the beatings will continue until morale improves.

We the undersigned urge the Government to rule out an exit tax and focus instead on making the UK the most attractive place in the world to build and scale the next trillion dollar companies.

Yours sincerely, 

Startup Coalition