- A survey found half would consider leaving the UK if capital gains tax increased.
- Six in ten owners said a CGT rise would deter startups, while fifty-one percent might quit over a wealth tax.
- The Budget on October twenty-eighth, twenty twenty-six is the next decision point for proposed tax changes.
Business owners and City figures are warning Healey and Burnham that a capital gains tax increase could drive entrepreneurs and investors out of Britain ahead of the Budget. The date is 28 October 2026.
A survey of 500 business owners by S&W found that 50% would consider leaving the UK if CGT increased. 51% said they would consider quitting if a wealth tax were introduced. The responses also point to concern about company formation: six in 10 respondents said a CGT rise would deter them from starting a business.
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The proposal drawing the sharpest attention would lift the higher CGT rate from 24% to as high as 45%, or bring the rate into line with income tax bands. John Healey is due to deliver the Budget, while Andy Burnham has ruled out several other tax rises.
The debate is unfolding as the government’s fiscal room narrows. One report puts Healey’s remaining headroom at about £12bn, down from the £23.6bn inherited from Rachel Reeves, with higher borrowing costs adding pressure. The estimates vary, but the constraint is clear.
Toby Tallon, a tax partner at S&W, said the survey responses were “sending a clear warning to the chancellor”.
Emma Reynolds, chief secretary to the Treasury, declined to reassure business owners about the Budget.
“I can’t give any reassurance on the budget. All I can say is that one of the reasons we are doing the budget earlier than last year is that we are trying to, as much as we can, reduce the amount of speculation, because there is a lot of it. And it’s very often inaccurate and unhelpful.”
A Treasury spokesman said tax decisions would be announced at fiscal events, rather than discussed in response to speculation.
“As has always been the case, decisions on tax are a matter for the chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”
The current CGT schedule starts at 18% for basic-rate taxpayers
The standard rates and allowance cited for the current tax year provide a baseline for the proposals.
| Category | Rate or allowance |
|---|---|
| Basic-rate CGT | 18% |
| Higher and additional-rate CGT | 24% |
| Annual CGT allowance, 2026-27 | £3,000 |
The higher-rate increase under discussion is not the only possible shape of reform. One version would equalise CGT with income tax, while another proposal would increase the higher rate to 34% from 24%. Each would change the tax treatment of gains, but revenue estimates depend on how investors respond.
Senior financiers and chief executives have warned that a sharp increase could damage growth, weaken investment and prompt wealthy entrepreneurs to leave Britain. They argue that a higher charge could discourage people from taking risks or building businesses. The survey’s findings add business owners’ stated intentions to that concern.
Revenue projections point in opposite directions
Supporters of equalising CGT with income tax argue that gains are taxed more lightly than earnings. A paper backing that approach estimates it could raise £14bn, although it acknowledges that changes in behaviour could reduce the yield. CenTax researchers estimate alignment could raise a further £19.7bn in 2030.
A separate estimate puts the potential revenue from reforming CGT and related taxes at £26bn. Those projections describe different proposals, rather than a single settled forecast. The figures also sit alongside warnings that investors could sell assets less often, relocate or alter business decisions after a rate rise.
Robert Salter, a director at Blick Rothenberg, estimated that raising the higher rate to 34% from 24% would reduce receipts by £540m in 2026-27, £2.06bn in 2027-28 and £3.5bn in 2028-29. That forecast captures the opposite possibility: a higher headline rate may not produce higher receipts if taxpayers change their behaviour.
Another estimate puts the revenue loss from a 10 percentage point increase at £3.5bn by 2028-29. The competing figures frame the argument now facing ministers: the potential gains depend on the policy design, but also on how investors react once it takes effect.
Tax pledges have narrowed the options under discussion
The pressure to find revenue comes as Labour’s manifesto rules out increases to income tax, VAT and national insurance for workers. CGT, inheritance tax and other taxes on wealth have therefore featured among the options being discussed. One account of Burnham’s position also says he has ruled out raising corporation tax and social security contributions.
Dale Vince, a Labour donor, has argued for aligning CGT with income tax. He said wealth is being “taxed more lightly than work.” Advocates say a reform could help finance a cost-of-living package for lower earners.
The government has defended its broader approach without confirming a CGT change. A spokesperson said: “We have taken significant steps to ensure those with the broadest shoulders contribute more, while protecting working people and maintaining a competitive tax system that supports investment and growth.”
That position sits alongside warnings from business groups about investment and business formation. Some owners say they would reconsider launching a company; others say they might leave the country if rates rise. These are survey responses, not evidence that respondents have already moved or changed plans.
The Budget on 28 October 2026 is the next decision point. Healey is expected to set out the government’s tax choices then, including whether to change CGT rates.
