Startups Slam UK Finance For ‘Dangerous’ Tax Penalty Proposal
(Bloomberg) -- A proposal to penalize UK startups that take advantage of state support and then list abroad of has been called “dumb” and “dangerous” by a group representing early-stage companies.
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UK Finance, which represents the financial services industry, said in a policy paper that the next government should consider ways to claw back some or all tax breaks and other incentives if a startup “ultimately chooses to list, or move valuable operations, outside the UK.”
The proposal was criticized by rival lobby group the Startup Coalition, whose executive director Dom Hallas said it was “not only a dumb idea, it’s a dangerous one.” He added: “If our ‘much vaunted’ financial services sector wants to understand why lots of innovative businesses don’t see their future as listing in the UK they would be better off taking a look in the mirror.”
It comes as the UK continues to grapple with companies shifting their listing from London to New York and startups increasingly eye higher stock market valuations on US exchanges.
UK Finance’s idea is not currently under consideration by either the Conservatives or Labour as the country heads to the polls Thursday in the general election.
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