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Capital Gains Tax concerns loom over UK tech sector ahead of Autumn Budget

October 18, 2024

The UK tech industry is on edge as speculation mounts over potential changes to Capital Gains Tax (CGT) in the upcoming Autumn Budget.

Leading audit and advisory firm Blick Rothenberg has expressed concerns that such changes could have a detrimental impact on the fintech ecosystem, a key driver of the UK’s global tech reputation.

Simon Gleeson, a partner at the firm, commented: “This week has been turbulent for the UK tech sector. Keir Starmer’s ambiguous stance on potential tax rises, as hinted by Rachel Reeves at the International Investment Summit 2024 in London, has only heightened uncertainty.”

A letter signed by 66 fintech leaders, warning of a potential exodus if CGT increases, has added to the growing anxiety. Gleeson noted that some employees at Monzo are reportedly looking to cash out before the budget, fearing higher tax rates.

He added: “Start-ups and founders, known for their resilience and vision, may face what feels like punitive measures if taxed more heavily for long-term rewards. Such changes risk sending negative signals to international investors, undermining the UK’s appeal as a hub for talent and innovation.”

Despite the uncertainty, the government announced a positive note at the summit, highlighting £63 billion in new investment and 38,000 job creations. However, the upcoming Budget remains a significant source of apprehension.