The UK’s latest Budget has cast uncertainty over its reputation as an entrepreneurial hub, with business leaders warning of a potential exodus of talent and investment.
Shalini Khemka, CEO of E2E Entrepreneurship Community, expressed her disappointment over the Budget’s new tax measures, which she believes will deter entrepreneurs and business owners. “Today’s budget shows that the current government is not a business government,” she said. “The changes announced by Chancellor Rachel Reeves will target people who help grow the economy.”
The Budget includes several tax amendments affecting small and large businesses alike, including an increase in capital gains tax, increasing employers’ National Insurance contributions to 15%, and capping business property relief at £1 million with a 50% discount. On the rest. Business asset disposal relief (formerly known as entrepreneur relief) and inheritance tax (IHT) on AIM-listed shares will also be subject to new restrictions. AIM shares, which are now subject to a 20% IHT rate, will see a reduction from the previous 40% dilution, a move that Khemka warns could reduce liquidity and investment options for SMEs.
In addition, the abolition of non-resident status, the increase in stamp duty, and the introduction of VAT on private schools add further barriers for international entrepreneurs looking to the UK as a base for their ventures. Khemka says these measures create an unfavorable environment for overseas talent: “This sends a clear message that we do not welcome entrepreneurs from abroad who want to start their businesses in the UK.”
The response from the business community was rapid. According to Khemka, many entrepreneurs in her network now see moving abroad as an increasingly attractive option. “For many, this budget has reinforced any confusion about whether to move abroad, and they will seek to move as quickly as possible,” she noted, anticipating a potential decline in growth as the UK becomes less competitive.
With taxes rising and exemptions falling, the UK’s reputation as a pro-business destination faces major challenges. Experts warn that without a more supportive approach, the UK may struggle to retain the talent and innovation essential for economic growth.
Comments are closed, but trackbacks and pingbacks are open.