Britain’s latest budget has raised uncertainty about its reputation as a center for entrepreneurship, with business leaders warning of a possible exodus of talent and investment.
Shalini Khemka CBE, CEO of entrepreneurial community E2E, expressed disappointment at the Budget’s new tax measures, which she said will deter entrepreneurs and business owners. “Today’s budget shows that the current government is not the government for business,” she said. “The changes announced by Chancellor Rachel Reeves will target the very people who help the economy grow.”
The budget includes several tax adjustments impacting both small and large businesses, including an increase in capital gains tax, an increase in employer national insurance contributions to 15% and a cap on the business property exemption of £1 million with a 50% discount. %. on the rest. Business Asset Disposal Relief (formerly Entrepreneurs’ 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% exemption, a move Khemka warns could reduce liquidity and investment opportunities for SMEs.
In addition, the abolition of Non-Dom status, an increase in stamp duty and the introduction of VAT on private schools are creating further barriers for international entrepreneurs looking to Britain as a base for their businesses. Khemka argues that these measures create an environment unfavorable for foreign talent: “This sends a clear message that we do not welcome entrepreneurs from abroad who want to start their business in Britain,” she said.
The response from the business community was swift. According to Khemka, many entrepreneurs in her network now see moving abroad as an increasingly attractive option. “For many, this Budget has added to the confusion over whether they should move abroad, and they will be looking to move as quickly as possible,” she noted, predicting a potential slowdown in growth as Britain becomes less competitive .
Rising taxes and reduced tax exemptions are facing major challenges to Britain’s reputation as a business destination. Experts warn that without a more supportive approach, Britain could struggle to retain the talent and innovation vital to economic growth.