Entrepreneur calls for Bank of England tax breaks for startups and SMEs

A British entrepreneur has called on the Bank of England to do more to encourage investment in UK startups and small and medium enterprises [SMEs] so that they become successful and stay in the UK.

Dan Wagner, CEO of Powa Technologies, wants capital gains tax to be completely removed as well as tax incentives introduced to encourage what he thinks will be the main driver of the economy.

“We have some fantastic, inspirational entrepreneurs who start great businesses, but unfortunately many of them have to go abroad to get the funding they need to grow and succeed and that is a shame,” said Wagner. “Britain has great innovation across all areas and it needs to be nurtured and supported because it will be the lifeblood for the return of economic strength.”

The tax incentives mentioned by Wagner, which would see capital gains tax abolished for startups, will be designed to “allow more exports and more jobs to be created” and would be just as important politically.

“Any funds that are invested to create opportunities and jobs should see a full capital and profit return because of the great risks involved. This would be a political saviour. Small businesses represent 50% of the economy and its new small businesses that will drive future economic growth,” Wagner added.

One of the main worries that stops investors risking money behind a startup is the issue of tax, which can sometimes mean that an investment is no longer considered a success.

“We need to fund the startups and provide the right environment so investors who have earned their money and paid their taxes can risk an investment in a speculative start-up behind an entrepreneur they think might succeed. If they do this they don’t want to see their one successful investment out of the ten they have made get taxed at 30%. It doesn’t seem right,” Wagner said.

Startups are thriving in the technology sector and it’s likely the 15,000 that launched at London’s Tech City last year will rise if Bank of England governor Carney implements any of the measures mentioned by Wagner.

Image Credit: Flickr (James.Stringer)