Britain has been labelled the worst place in Europe to build wealth, with a leading tax expert warning that relentless uncertainty and punitive speculation are driving the nation's most dynamic business founders and investors overseas.
A Budget Lacking the Promised Spark
In the Autumn Budget, the Chancellor repeatedly claimed to have made the tax system fairer and stronger. She launched a call for evidence on supporting entrepreneurs, painting a vivid picture of economic growth with "spades in the ground and cranes in the sky." Her stated goal was to kindle the entrepreneurial spark needed to make Britain the world's best place to start, scale, and stay in business.
In reality, according to Stephen Kenny, partner and head of private client at PKF Littlejohn, the Budget delivered no such spark. Months of speculation culminated in a dull fiscal event, notable only because the Office for Budget Responsibility (OBR) published most of the content prematurely. While minor tweaks to Enterprise Management Incentives (EMIs) and the Enterprise Investment Scheme (EIS) offered a glimmer of hope, they were insufficient to counter the damage caused by persistent policy shifts and uncertainty.
The Entrepreneurial Demand: Fairness and Stability
Kenny, who has worked with entrepreneurs for most of his career, argues that what business builders need from the UK tax system is simple: fairness and stability. He contends both principles have been seriously undermined by successive governments, not just the current Labour administration.
Entrepreneurs require clarity on how they, their workers, and investors will be taxed. Instead, the lead-up to the Budget was marked by rampant speculation about exit charges, Income Tax rises, and new wealth taxes. This uncertainty actively pushes wealth creators toward other jurisdictions aggressively competing for their talent and investment.
"Barely a day goes by without speaking to someone thinking of leaving the UK," Kenny reveals, "often driven by the feeling they are 'not welcome' or that the country is 'anti-business'." He states that last year's changes to Business Property Relief, compounded by speculation about future punitive measures, have been the final straw for many.
A Punitive System Driving Talent Away
The current trajectory sends the wrong message, Kenny argues. Freezing Income Tax thresholds—meaning no increase for nearly a decade—and reducing salary sacrifice contributions disincentivise employees. The likely result will be higher taxes on workers and businesses facing increased wage inflation to compensate.
Combined with last year's rise in employer National Insurance, these changes feel punitive rather than supportive. For the UK to attract bold entrepreneurs, the Chancellor must match that boldness with clear, supportive policies.
Kenny's recommendations are not radical but foundational: reviewing the Foreign Income and Gains regime, reconsidering Inheritance Tax changes to Business Property Relief, ensuring tax bands keep pace with inflation, and incentivising savings. Above all, he stresses that businesses and entrepreneurs need certainty from a stable and principled tax system, not one shaken daily by rumours of new levies.
Until that certainty is provided, the UK will continue to struggle to convince its most ambitious individuals to build their businesses—and their lives—within its borders.
