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Startups criticise UK Finance over ‘dangerous’ tax penalty proposal
(Bloomberg) — A proposal to penalize U.K. startups that take advantage of state support and then list abroad has been called “stupid” and “dangerous” by a group representing early-stage companies.
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UK Finance, which represents the financial services sector, said in a policy paper that the next government should consider ways to claw back some or all of the tax breaks and other incentives if a startup “ultimately decides to list or move valuable operations out of the UK”.
The proposal was criticised by rival lobby group Startup Coalition, whose chief executive Dom Hallas said it was “not just a stupid idea, but a dangerous one”. He added: “If our ‘much-vaunted’ financial services sector wants to understand why so many innovative companies don’t see their future as a UK listing, they would do well to look in the mirror.”
It comes as the UK continues to grapple with companies moving their listings from London to New York and startups are increasingly eyeing higher stock market valuations on US exchanges.
The UK Finance idea is not being considered by either the Conservatives or Labour as the country goes to the polls on Thursday for the general election.
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