Tax is making firms flee UK

ONE in 10 entrepreneurs plan to leave the country because of the current UK regulatory and tax environment, according to a report by Investec.

A survey of 171 firms by Investec Specialist Private Bank and the Entrepreneurs’ Organisation revealed 10 per cent are planning to move their operations outside the UK.

Investec’s Ed Cottrell said: “These people will be key to helping the country recover from the recession, so it is alarming to see many considering moving their operations abroad to more favourable environments.”

Only seven per cent believe the current UK regulatory and tax environment makes it attractive to launch a new business in this country.

Boris Johnson has estimated as many as 9,000 City workers may quit the capital because of increasing tax rates on high earners.

The Treasury, however, believes London still offers companies an attractive place to do business.

A spokesman said: “London and the UK have enduring advantages such as high quality infrastructure, low cost of capital, and one of the lowest corporation tax rates among G7 countries. The Government is committed to ensuring we remain one of the best places in the world to do business.”

Only five per cent of those asked in the Investec survey expect access to capital to be easy during 2010, and a quarter of respondents said this would hold back their growth prospects in the UK.

But business optimism is improving, with 88 per cent expecting revenues from their UK businesses to increase in 2010. Two out of three said the UK economic environment will improve during the year.