According to Sifted, UK finance minister Rachel Reeves is reportedly considering a 20% exit tax on entrepreneurs leaving the country, targeting their British assets. The proposal has sparked immediate backlash from over 150 tech leaders who signed a Startup Coalition letter urging the government to rule out the measure in the November 26 Autumn Budget. Signatories include Revolut founder Nik Storonsky, who recently moved to Dubai, along with Wise founder Taavet Hinrikus and investors from Dawn Capital, Episode 1, and Notion Capital. The letter warns the tax would signal that founders’ innovations aren’t welcome in Britain. This comes as Reeves faces difficult budget constraints while trying to avoid raising taxes on working people.
Founder backlash hits hard
Here’s the thing – when you’ve got 150+ of your country’s most successful entrepreneurs and investors telling you something is a terrible idea, maybe you should listen. The Startup Coalition letter doesn’t mince words, calling the potential exit tax “sheer economic masochism.” And they’re not wrong. When founder confidence is already scraping bottom, threatening to take 20% of their British assets if they dare leave? That’s basically handing out one-way tickets to Dubai and Silicon Valley.
Global talent wars are real
Look at what’s already happening. Revolut’s Nik Storonsky packed his bags for Dubai earlier this year. How many others are quietly making exit plans? The Middle East and US are actively courting these founders with better tax regimes and less bureaucracy. Britain used to compete on being business-friendly, but this move would essentially tell entrepreneurs: “Thanks for building your company here, now pay up if you want to leave.” It’s like putting a toll booth on the highway out of town.
The real problem nobody’s fixing
Meanwhile, Boardwave CEO Kath Easthope points out the actual issue: UK firms take twice as long as US companies to scale from £10m to £100m. That’s the funding gap that needs addressing. Instead of punishing success, the government should be creating conditions where founders want to stay and build. Think about it – would you stick around somewhere that treats departure like a crime?
Economic self-sabotage in motion
The timing couldn’t be worse. Britain’s tech sector has been one of the few bright spots in an otherwise struggling economy. Now we’re talking about measures that could drive away the very people creating jobs and innovation. Dom Hallas from Startup Coalition nails it – anything that punishes success instead of nurturing it will only make things worse. When even your most successful homegrown entrepreneurs feel unwelcome, you’ve fundamentally lost the plot.
