BrewDog founder James Watt has hit out at plans to raise capital gains tax, warning hikes will prompt entrepreneurs to leave UK.

Watt, who formed the craft beer colossus with Martin Dickie in 2007, made the comments ahead of a stock market float of the brewer that may lead to a substantial payout.

Talking on LinkedIn with an open post to Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves, Watt warned raising capital gains tax would "destroy entrepreneurial spirit in the UK and in turn severely damage our economy”.

He added that entrepreneurs would be likely to snub the UK in favour of building businesses and creating jobs overseas instead.

Watt said: “If we lose our brightest and best entrepreneurs, which we undoubtedly will if we significantly increase capital gains tax, we deal a hammer blow to the UK economy and the overall prosperity of every single UK family.

“Increasing capital gains tax will do far more damage to our economy than any gains we may experience from increasing this tax.”

It comes as BrewDog considers a stock market float which Watt had previously indicated could value the company at £1.8billion.

Meanwhile, the BBC is reporting the chancellor is looking to make tax rises and spending cuts to the value of £40billion in the Budget which is to be announced later this month.

In a cabinet meeting on Tuesday, Reeves advised ministers that filling a £22billion funding blackhole "inheritance from the previous government" would only be enough to maintain public services at their current level.

So Reeves is now looking to find £40billion in order to avoid real-terms cuts to departments, sources told the BBC, as first reported in the Financial Times, external and the Times,.

The chancellor warned ministers there would be "difficult decisions on spending, welfare, and tax" to come in her Budget, which is due to be announced on October 30.

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