Freddie Downing is a Chartered Tax Adviser and Chartered Accountant specialising in advising owner-managed businesses and high net worth individuals. He is a former Conservative parliamentary and London Assembly candidate.
A few weeks ago, my fiancé and I bought a new car.
It’s a nice car. Nothing flashy. As we sorted out the paperwork, I assumed we’d be paying around £200 a year in road tax.
Instead, we’ll be paying more than £600 because our car falls within the scope of the so-called “luxury car tax.”
It’s only a few hundred pounds a year. But for me, it captures a much deeper problem with modern Britain.
You work hard. You pay your taxes. You save responsibly. You try to buy something a little bit nicer. And the government turns around and says: ‘Congratulations. You’ve done well. We’ll take a little bit more, thank you very much.”
It speaks to a wider truth about Britain today: we no longer celebrate success. We penalise it.
As a Chartered Tax Adviser specialising in advising high net worth individuals and owner-managed businesses, I’ve watched the impact of this mentality first hand. Speaking to colleagues across the profession, we’ve all seen the same thing: successful entrepreneurs increasingly asking whether Britain is still the best place to invest and build a business.
Think about what entrepreneurship actually means. These are people who’ve worked eight days a week, taken huge risks and tried to build something from nothing. Many fail. Some succeed.
And when they do succeed, we all benefit. They employ people, provide products and services people actually want and create the wealth that ultimately funds everything else. They are exactly the people we should want more of.
Instead, we’ve spent years making Britain a less attractive place to build a business.
Take Entrepreneurs’ Relief, now Business Asset Disposal Relief. Ten years ago, an entrepreneur who built and sold a successful business could pay tax at 10 per cent on the first £10 million of gains. Today, the lifetime allowance has been slashed to £1 million, and the tax rate has almost doubled under Labour to 18 per cent.
The result? An entrepreneur who builds a £10 million business from scratch today faces a tax bill that’s 234 per cent of what it would have been at the start of 2020.
We’ve already seen the consequences. According to Henley & Partners, almost 11,000 millionaires left the UK in 2024, with a further 16,500 estimated to have left in 2025. Given that the top 1 per cent of taxpayers account for almost 30 per cent of all income tax receipts, that exodus should worry us all.
Yet Labour’s answer to every economic problem remains exactly the same: spend more, borrow more and tax more.
Einstein is often credited with saying that insanity is doing the same thing over and over again and expecting different results. If that’s right, Labour’s economic strategy would have had him banging his head against the nearest wall.
Which brings us to reports that Andy Burnham, should he make it to Number 10 – wherever he decides to locate it – wants to align CGT rates with income tax.
It’s shocking. But it isn’t surprising.
Labour genuinely believes that you can tax your way to growth. They cannot comprehend the damage that higher taxes inflict on ordinary people, on business and on the economy as a whole. Their approach increasingly resembles that famous scene from The Simpsons where the characters find themselves trapped in a deep hole and decide the solution is to “dig up.”
Denis Healey, a one-time Labour Chancellor himself, had better advice: when you’re in a hole, stop digging.
What’s especially revealing is that Labour is already talking about an ‘exit tax’ alongside any increase in CGT.
Think about what that means.
Labour knows that higher CGT rates will make the UK a less attractive place to invest and build a business. Their solution isn’t to avoid the damage. Their solution is to make it harder to leave.
As a tax adviser, I can confirm these concerns are very real. We’ve already been approached by clients worried about future increases in CGT and asking what their options are.
Some on the Left will point out that Nigel Lawson aligned CGT and income tax rates in 1988. But that comparison simply doesn’t stand up. Lawson aligned the rates whilst dramatically reducing income taxes overall. The top rate of income tax had more than halved whilst the basic rate had fallen from 33 per cent to 25 per cent. The direction of travel was clear: taxes were coming down.
That is not remotely comparable to Labour’s approach today.
This, ultimately, is Labour’s problem. They don’t understand business. They don’t understand wealth creation. And they certainly don’t understand aspiration.
If we want a more prosperous country, we need to reward the things that create prosperity. We need the entrepreneurs who build businesses, create jobs, generate profits and pay taxes.
Because the truth is very simple. If we tax success, we’ll get less success. And we’ll all be poorer for it.
A few weeks ago, my fiancé and I bought a new car.
It’s a nice car. Nothing flashy. As we sorted out the paperwork, I assumed we’d be paying around £200 a year in road tax.
Instead, we’ll be paying more than £600 because our car falls within the scope of the so-called “luxury car tax.”
It’s only a few hundred pounds a year. But for me, it captures a much deeper problem with modern Britain.
You work hard. You pay your taxes. You save responsibly. You try to buy something a little bit nicer. And the government turns around and says: ‘Congratulations. You’ve done well. We’ll take a little bit more, thank you very much.”
It speaks to a wider truth about Britain today: we no longer celebrate success. We penalise it.
As a Chartered Tax Adviser specialising in advising high net worth individuals and owner-managed businesses, I’ve watched the impact of this mentality first hand. Speaking to colleagues across the profession, we’ve all seen the same thing: successful entrepreneurs increasingly asking whether Britain is still the best place to invest and build a business.
Think about what entrepreneurship actually means. These are people who’ve worked eight days a week, taken huge risks and tried to build something from nothing. Many fail. Some succeed.
And when they do succeed, we all benefit. They employ people, provide products and services people actually want and create the wealth that ultimately funds everything else. They are exactly the people we should want more of.
Instead, we’ve spent years making Britain a less attractive place to build a business.
Take Entrepreneurs’ Relief, now Business Asset Disposal Relief. Ten years ago, an entrepreneur who built and sold a successful business could pay tax at 10 per cent on the first £10 million of gains. Today, the lifetime allowance has been slashed to £1 million, and the tax rate has almost doubled under Labour to 18 per cent.
The result? An entrepreneur who builds a £10 million business from scratch today faces a tax bill that’s 234 per cent of what it would have been at the start of 2020.
We’ve already seen the consequences. According to Henley & Partners, almost 11,000 millionaires left the UK in 2024, with a further 16,500 estimated to have left in 2025. Given that the top 1 per cent of taxpayers account for almost 30 per cent of all income tax receipts, that exodus should worry us all.
Yet Labour’s answer to every economic problem remains exactly the same: spend more, borrow more and tax more.
Einstein is often credited with saying that insanity is doing the same thing over and over again and expecting different results. If that’s right, Labour’s economic strategy would have had him banging his head against the nearest wall.
Which brings us to reports that Andy Burnham, should he make it to Number 10 – wherever he decides to locate it – wants to align CGT rates with income tax.
It’s shocking. But it isn’t surprising.
Labour genuinely believes that you can tax your way to growth. They cannot comprehend the damage that higher taxes inflict on ordinary people, on business and on the economy as a whole. Their approach increasingly resembles that famous scene from The Simpsons where the characters find themselves trapped in a deep hole and decide the solution is to “dig up.”
Denis Healey, a one-time Labour Chancellor himself, had better advice: when you’re in a hole, stop digging.
What’s especially revealing is that Labour is already talking about an ‘exit tax’ alongside any increase in CGT.
Think about what that means.
Labour knows that higher CGT rates will make the UK a less attractive place to invest and build a business. Their solution isn’t to avoid the damage. Their solution is to make it harder to leave.
As a tax adviser, I can confirm these concerns are very real. We’ve already been approached by clients worried about future increases in CGT and asking what their options are.
Some on the Left will point out that Nigel Lawson aligned CGT and income tax rates in 1988. But that comparison simply doesn’t stand up. Lawson aligned the rates whilst dramatically reducing income taxes overall. The top rate of income tax had more than halved whilst the basic rate had fallen from 33 per cent to 25 per cent. The direction of travel was clear: taxes were coming down.
That is not remotely comparable to Labour’s approach today.
This, ultimately, is Labour’s problem. They don’t understand business. They don’t understand wealth creation. And they certainly don’t understand aspiration.
If we want a more prosperous country, we need to reward the things that create prosperity. We need the entrepreneurs who build businesses, create jobs, generate profits and pay taxes.
Because the truth is very simple. If we tax success, we’ll get less success. And we’ll all be poorer for it.