Capital gain taxes are a levy imposed upon the profit from the sale of assets which have increased in value, such as stocks, bonds, cryptocurrencies, and second homes.
During an interview with Sky News, BrewDog co-founder and former chief executive James Watt said that increasing the tax on such assets would result in business leaders leaving the UK.
While stating that the UK Government had been “dealt a terrible hand”, the multi-millionaire from Aberdeenshire claimed that increasing capital gains tax would make it worse.
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“I think it’s going to have so many bad consequences for the UK economy,” he said.
“And I think it’s going to lead to less tax in general.
“Firstly, so many fantastic entrepreneurs, founders, job creators are simply going to leaved the UK. We’re going to see a mass exodus, especially those in the tech sector.
“Secondly, for me this is going to lead to less tax over all.
“People who start businesses, they also pay National Insurance, then PAYE for their team, corporation tax.
“And we really need jobs, we need job creation, we need investment in our economy, we need economic growth.
“This is going to lead to less tax overall.”
Brewdog founder James Watt says he doesn’t envy the government’s position but feels raising capital gains tax will lead to “bad consequences” for the UK economy. https://t.co/PAiZ4D1jU3
📺 Sky 501 pic.twitter.com/Fl7QQwbQrS
— Sky News (@SkyNews) October 18, 2024
“So, it would be so anti-business if they disincentive that.”
The Treasury has refused to comment on “speculation around tax changes outside of fiscal events”.
During the General Election, Labour promised not to increase taxes on “working people”.
Yet repeated warnings from Chancellor Rachel Reeves that “difficult decisions” need to be made have led to speculation that capital gains tax may increase.
Watt said there was a “huge problem with the public finances” and that the UK Government needed to plug the national debt.
Yet he said he was “distraught” by the idea that the UK Government could recategorise the national debt to enable them to borrow more.
“A neat slight of hand but everyone knows you’re going to pay for it the next day.”
When asked how he would reduce the level of public debt, he said the government should look at “how efficiently we can run our services”.
He said he agreed public services were in a “terrible state” but said raising capital gains tax would result in less tax income overall and would make the problem worse.
When asked if he would leave the UK if capital gains tax increased, he said he had no plans to but that other entrepreneurs, particularly in the tech sector, would move to Dubai and the Middle East.
Earlier this year, BrewDog abandoned its commitment to the pay the real living wage to its employees.