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Executives from some of Britain’s most valuable technology start-ups have warned Rachel Reeves that proposed tax measures in this month’s budget could force them to abandon London listing plans. According to Sky News, a letter was sent this week by companies like Revolut and Clearscore, urging the Treasury not to impose an exit tax on wealthy individuals or take steps “which will result in reduced confidence or hesitant investment in the UK.” Collectively, the firms behind the letter are valued at over $100bn (£80.3bn). The signatories warned that changes to capital gains tax or inheritance tax rules could make the UK less attractive for founders, dampen investment in start-ups, hinder innovation, and lead to delayed or cancelled IPOs. The letter was sent with the approval of Innovate Finance’s Unicorn Council for UK FinTech. “Founders need to see a stable and favourable taxation environment in order to take the risk of building a business in the UK,” the letter said. Pressure mounts on Reeves The warning comes at a sensitive time for the Treasury. Reeves has personally courted the start-up community over recent months, hosting roundtables with firms including Clearscore, OakNorth, and Revolut to promote London as a prime listing venue for fast-growing tech businesses. Earlier this week, she hosted a reception at Downing Street celebrating the performance of the UK equity market. “I am not immune to the narrative that has surrounded UK equity markets, and I too want to see more listings, both joining and staying on our equity markets,” Reeves told attendees. “The performance of our markets this year has been much stronger than you would think if you read the financial press. In fact, the FTSE 100 and FTSE All-Share are close to record highs.” Revolut, expected to be valued at around $75bn in an ongoing share sale, has been working to secure a full UK banking licence. Francesca Carlesi, Revolut’s UK chief executive and co-chair of the Unicorn Council, was among the letter’s signatories. Other signatories include Vishal Marria, founder of financial crime detection firm Quantexa; OakNorth founder Rishi Khosla; ClearScore chief executive Justin Basini; and ThoughtMachine boss Paul Taylor. IPO draught The letter comes amid broader concerns about London’s ability to retain high-growth firms. Recent IPOs have struggled. Deliveroo, which was listed in 2021 at £7.6bn, was acquired by US rival DoorDash for £2.9bn this year, after its shares slumped by more than 50 per cent following its listing. Meanwhile, cybersecurity firm Darktrace, listed in 2021 at £1.7bn, was taken private by US private equity group Thoma Bravo in 2024 at a $5.3bn valuation, citing greater flexibility in US markets for employee equity and investment. Charles Hall, head of research at Peel Hunt, told a recent capital markets summit: “There are a lot of companies that do want to IPO… we’ve got a list of 20 to 25 companies that would be brilliant IPOs for the UK. The challenge for us is keeping them in the UK.” He added that reforms to boost domestic capital must come quickly, warning that if firms such as AstraZeneca or Revolut opt for US listings, others will likely follow. Reeves will deliver her second Budget on 26 November, with an increase in the basic rate of income tax now expected as the government seeks to plug a fiscal gap worth tens of billions of pounds. Founders’ warnings suggest the treatment of tech entrepreneurs and investors will be closely scrutinised as the chancellor balances fiscal pressures with efforts to keep London competitive in the global IPO market.
