The founder of BrewDog has lashed out at plans by Sir Keir Starmer and Rachel Reeves to raise capital gains tax, ahead of an expected stock market listing that would put him in line for a major windfall.
James Watt said a large rise in capital gains tax in the Budget on Oct 30 “will destroy entrepreneurial spirit in the UK and in turn severely damage our economy”.
In a post on LinkedIn, he wrote: “Most of the brilliant business minds that I know, the people who drive our economic growth and create our jobs, will simply leave the UK to build businesses and create jobs elsewhere.
“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.”
His comments come as BrewDog considers a stock market float, which Mr Watt previously claimed could value the company at as much as £1.8bn. No formal IPO process is yet under way and other options including a private equity sale are also being considered.
Mr Watt co-founded BrewDog with fellow entrepreneur Martin Dickie 17 years ago, but stepped down as chief executive earlier this year, following a string of controversies including allegations that he presided over a “toxic” culture at the company. He handed the reins to former Boots Opticians boss James Arrow.
Mr Watt remains a significant shareholder in the company with 21pc of its equity. If BrewDog did achieve a £1.8bn IPO, he would be in line for a windfall of more than £370m before tax.
Shares sales would be liable to capital gains tax. Higher earners currently pay a 20pc rate on profits from the sale of assets such as company stock.
Reports have suggested that Ms Reeves could raise capital gains tax to as high as 39pc, as she seeks to plug an alleged £22bn “black hole” left in the nation’s finances by the last Conservative government.
Sir Keir has said talk of a 39pc rate was “wide of the mark” but Ms Reeves has stoked speculation that the rate will be increased by saying this week that “those with the broadest shoulders will be bearing the largest burden”.
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