Entrepreneurs are calling for Andy Burnham to rule out an exit tax or risk another wave of Britain’s wealth creators quitting the UK.

Speculation around a so-called ‘settling up’ charge, which would be levied on business owners if they leave the country, is already causing some founders to consider moving overseas, several executives told City AM.

“Labour needs to rule it out now but they won’t… founders are already planning their exit routes,” said Barney Hussey-Yeo, the founder of fintech Cleo, which was last year valued at over $1bn.

“It’s going to be devastating for the UK economy,” he said.

A so-called exit tax would involve applying a capital gains tax to individuals who permanently leave the UK. Some countries including the US apply a tax when individuals move abroad.

When asked if Burnham would rule out exit taxes, a spokesperson said they would not comment on speculation or write tax policy “off the cuff”.

‘It would be devastating’

In his Makerfield by-election campaign, the newly-minted MP made a number of expensive promises including the nationalisation of utility firms, some form of compensation for Waspi women and reviving the HS2 leg to Manchester.

Burnham’s commitment to Reeves’ fiscal rules – which aim to bring down the amount of government borrowing – has put the spotlight back on potential tax hikes.

“Founders have so much at stake,” Andreas Adamides, the chief executive of start-up network Helm, told City AM, adding that piling more pressure “would cause so much pain”.

“It’s incredible to even be considering adding more hurdles and more burdens to founders,” he said. “What we would really love and would welcome is a little bit of clarity about certain areas that might not be touched at the absolute minimum.”

A new summer of tax speculation?

Last year, the leaders of Britain’s tech unicorns intervened with a letter to Rachel Reeves warning that an exit tax would undermine confidence in the UK and force them overseas.

Dan Neidle, the founder of Tax Policy Associates, warned against tax speculation and said exit tax rumours last summer “caused some entrepreneurs to leave the UK.”

“An exit tax is something that will probably increase the people running for the exits,” Adamides said.