We’ve seen enough U-turns, it’s time to signal the UK is open for business

At the height of budget speculation last year, Barney Hussey-Yeo took to X to vent his frustration about rumours the government was going to implement an “exit tax” on wealthy individuals leaving the UK. “I get it,” wrote the founder of Cleo, a fast-growing UK fintech company. “We just saw Nik [Storonsky] from Revolut move to Dubai and pay zero capital gains tax. This looks like a simple solution. It’s not. It has devastating side effects for the UK.”

The exit tax never happened. Nor did a rumoured wealth tax. Storonsky, it turns out, has switched his residency back to the UK. But the turmoil of that budget run-up took a toll. “The rhetoric did more damage than the policy,” Hussey-Yeo says.

This government has learned the hard way that signals matter. The chancellor’s plans to attract sorely needed investment collided with two tax controversies – the abolition of non-dom status (inherited from the previous government) and a clampdown on inheritance tax for trusts – that unsettled philanthropists, angel investors and family offices alike. Yet speaking to global investors, it is the trust tax, not the non-dom rules, that generates more worry.

We’ve seen enough U-turns. Moving on, there are signals that the government should now communicate, unequivocally, that the UK is open for business.

Repeat entrepreneur relief – where founders are able to defer capital gains tax after an exit if they reinvest in British start-ups and scale-ups – is one. “France has introduced a similar policy as part of a broader push to attract and retain entrepreneurial talent,” notes Brent Hoberman, co-founder of the Enterprise Britain movement and serial entrepreneur. “The UK should be competing just as aggressively.”

Alongside this, the UK needs a faster and more affordable high-skill visa system. The US is bleeding talent, but Britain has acted late and is being outspent by Spain and Germany on attracting it. “Openness is not a concession; it is a competitive advantage,” says Rain Newton-Smith, chief executive of the CBI. “When the UK brings together the brightest minds from home and abroad, British students, workers and businesses all benefit.”

The third signal is restoring confidence in the City of London as Europe’s primary financial hub. Changes to listing rules have fattened the pipeline of potential IPOs in the second half of this year, but more must be done to encourage business to scale and float here. Flexibility is key.

The chair of one of Britain’s biggest insurers recently told me that the success of the UK’s fintech sector is one of the best examples of industrial policy they’ve seen this century. The Treasury put pressure on the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) to accommodate disruption, and it worked. That’s a model that ought to be replicated, not least with our burgeoning AI sector and the “Demis diaspora” of companies springing up around DeepMind in Kings Cross.

As once safe havens come under fire, “regrexit” is on the rise among the wealthy residents who left the UK for tax reasons. A small welcome back might go a long way.

Photograph by Michael Nguyen/NurPhoto via Getty Images