UK Chancellor Ponders Exit Tax as Entrepreneurs Warn of Talent Flight

Standing beside Revolut founder Nik Storonsky at the companys opulent new London headquarters, Chancellor Rachel Reeves praised his commitment to investing in Britain, calling it a signal of confidence in the economy. Yet only days later, news emerged that Storonsky had left the UK for the United Arab Emirates, a move with significant fiscal implications. Tax Policy Associates estimate that selling his Revolut stake could have triggered a capital gains tax bill of around three billion pounds.

The government is now weighing the introduction of an exit or settling up tax. This measure would impose a twenty percent levy on gains for affluent individuals choosing to emigrate. Sources indicate that the Exchequer currently loses approximately five hundred million pounds annually due to entrepreneurs relocating to low tax jurisdictions. The proposed tax is part of broader efforts to raise around thirty billion pounds and address a significant public finance deficit.

Countries such as the United States already have similar levies. The American exit tax applies to individuals with net assets exceeding two million dollars who renounce citizenship or permanent residency. Among G7 nations, only Italy and the UK have not implemented a comparable tax. Academic perspectives, including research from Andy Summers at the London School of Economics, note that the majority of business leavers migrate to countries allowing tax free business sales, reinforcing the incentive to exit for fiscal reasons.

Support for such a measure exists among policy analysts and the public. YouGov polling suggests sixty percent of Britons would back an exit tax, ranking it high among popular potential tax reforms. The Resolution Foundation, with close links to the current Treasury, also champions the policy as a move toward fairness, ensuring wealthy individuals cannot evade taxation by relocating. However, technology executives and founders are united in their opposition. They argue that far from discouraging departures, the tax would intensify Britain’s entrepreneurial brain drain by propelling talent and future listings overseas.

Recent data suggests founder concerns are widespread. The Entrepreneurs Network reports that more than a quarter of UK business creators are actively considering emigration, a marked rise over prior surveys. Open letters to the Chancellor, co signed by leading technology companies including Revolut, Zilch, Oaknorth, and Clearscore, warn that more punitive taxation would undermine the business climate and shift domestic firms’ global ambitions elsewhere.

The business community remains wary. Persistent changes to capital gains tax, adjustments to business asset disposal relief, and the uncertainty of yet further fiscal revisions have already prompted record levels of equity backed company sales. Entrepreneurs express reluctance to expand or remain under a government perceived as hostile to wealth creation. Pressure from founders and investment groups continues as the Treasury considers its next steps. Official statements offer no confirmation regarding future taxation until the release of the forthcoming Budget.