The founder of BrewDog, James Watt, has warned that if the government decides to increase the capital gains tax, many entrepreneurs might choose to leave the UK. He believes this could have serious consequences for the country’s economy, as it would discourage investment and hurt businesses that are essential for growth. In an interview with Sky News, Watt expressed his concerns, stating that raising this tax will likely do more harm than good.

What Is Capital Gains Tax?

Before we dive into Watt’s warnings, let’s first understand what capital gains tax is. This is a tax on the profit made from selling assets like shares, property, or businesses. For instance, if you sell your company or part of it and make a profit, the government takes a portion of that through capital gains tax. Right now, this tax can go up to 20%. However, the Chancellor of the Exchequer is expected to announce a rise in this rate during the budget speech on October 30th. This has sparked fears among entrepreneurs and business owners.

“It Will Hurt the Economy”

James Watt is concerned that increasing this tax will hurt the economy more than it helps. In his interview, he stated, “Raising capital gains tax won’t just affect business owners—it will impact the entire economy and every family in Britain.” Watt explains that many business owners are already paying other taxes, such as national insurance and corporation tax, which support the economy by creating jobs and fueling business growth. Adding an extra financial burden through higher capital gains taxes could discourage new startups and hurt existing businesses.

Watt argues that the UK needs businesses to thrive in order to grow its economy. The country depends on investments from entrepreneurs to create jobs, innovate, and boost economic growth. If the tax is too high, business owners might think twice about expanding their companies or even starting new ones. This could lead to fewer job opportunities, less investment, and a slower economy.

“Entrepreneurs May Leave the UK”

Watt went on to explain that if the government makes it too expensive to do business in the UK, some entrepreneurs will look for better opportunities elsewhere. While Watt himself said he wouldn’t leave his home in Scotland if the tax increases, he is worried that others will. He specifically mentioned entrepreneurs in the tech industry who might decide to relocate to countries like Dubai, where taxes are lower.

If that happens, it could be a big blow to the UK’s economy. Entrepreneurs are essential for innovation and job creation, and losing them would mean fewer new businesses, fewer jobs, and less investment in the country.

What Does This Mean for Businesses?

Watt, who founded BrewDog, one of the UK’s most well-known brewery and pub chains, knows firsthand how important it is to support businesses. He believes that the government should focus on policies that encourage entrepreneurship, not ones that make it harder for people to start and grow their businesses. Watt explained that raising taxes on business owners might seem like a way to increase government revenue, but it could backfire. If businesses are less likely to grow or expand because of high taxes, the government could end up collecting even less in taxes.

For example, when businesses succeed, they create jobs and pay more in taxes such as national insurance, income tax for employees, and corporation tax. These contributions help fund public services like healthcare and education. However, if businesses are stifled by higher taxes, there will be less money flowing into the economy, leading to lower tax receipts overall.

The Bigger Picture

Watt’s warning comes as part of a larger debate over how to fund the UK’s public services while still encouraging economic growth. The government is under pressure to raise more revenue to pay for things like healthcare, education, and infrastructure, and raising taxes is one way to do that. But Watt argues that taxing businesses too heavily is not the solution.

Instead, he believes that the government should be focusing on ways to encourage businesses to grow. This could include lowering taxes, offering incentives for innovation, or creating policies that make it easier for people to start new companies. By doing this, the UK can ensure a healthy economy that provides opportunities for everyone.

What Happens Next?

The Chancellor is expected to announce the new budget on October 30th, and many are anxiously waiting to see what changes will be made. Entrepreneurs like James Watt hope that the government will reconsider raising capital gains tax and instead find other ways to fund public services without harming businesses.

Only time will tell whether Watt’s warnings will be heard by the government, but one thing is clear: the future of the UK’s economy depends on the success of its entrepreneurs. If taxes become too high, the country risks losing some of its brightest minds to other nations, taking their ideas, investments, and job opportunities with them.

Final Thoughts

James Watt’s concerns highlight the delicate balance between raising revenue for public services and supporting the businesses that drive the economy. While the government needs to fund essential services, it’s also important to create an environment where businesses can thrive. Raising capital gains tax may seem like a quick solution, but it could have long-term consequences that outweigh any short-term gains.

As Watt puts it, “We need economic growth, job creation, and investment in our country. Raising taxes on the very people who create these things is not the answer.” The UK must carefully consider how to encourage entrepreneurship and support businesses if it wants to continue growing and prospering.