Fund managers and founders backing some of Britain’s most innovative businesses are calling for greater tax stability and less tinkering with the rules, warning that further changes risk undermining investor confidence and driving entrepreneurs overseas.
In the latest episodes of Founders & Funders from Wealth Club, host Susannah Streeter, Chief Investment Strategist at Wealth Club and former BBC Business Anchor, has spoken to Stephen Page of SFC Capital, Andrew Wolfson, founder of Pembroke VCT, and Lucy Goff, founder and CEO of LYMA, about the challenges facing entrepreneurs and investors as the Government prepares its Budget.
Page warns that further tax increases could prompt entrepreneurs to take their businesses and investment elsewhere.
He points specifically to changes to Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs’ Relief, which have already increased the tax rate on qualifying gains.
“Recently it’s gone up, the business asset relief is now 18 percent not 10 for the first million they make,” Page says.
BADR allows qualifying business owners to pay a reduced rate of Capital Gains Tax on qualifying gains when they sell their business. Page warns that further changes could make the prospect of building a company in Britain considerably less attractive.
“Lots of entrepreneurs are going to say, ‘Look, I’m not going to build a company and then to pay it all to the government. It’s just not on,’” he says.
He argues that entrepreneurs should not be expected to remain in the UK out of loyalty if other countries offer more attractive conditions.
“Entrepreneurs will go where they can sell, they can raise money, whatever it is that they need to do. They will not just be totally loyal to the UK. So we have to give them the reasons to stay here,” he says.
Andrew Wolfson, founder of Pembroke VCT, shares the concern that changes to the rules can undermine the flow of capital into growing businesses.
“Taking away our ability to raise money is definitely not pro-growth. In fact, it’s a complete contradiction of what they’ve done,” he says.
He also cautions against constant rule changes, which he says wear down investor confidence. “I think any tinkering with any rules never really works out,” he says. “Any more tinkering and it’s going to get more confusing and more difficult for investors to trust the VCT ecosystem.”
His comments come as the venture capital trust (VCT) sector adjusts to changes to its own tax incentives. Income tax relief on VCT investments fell from 30% to 20% in April 2026, highlighting the challenge facing policymakers as they seek to encourage investment while reshaping tax reliefs.
For Lucy Goff, founder and CEO of LYMA, the challenge extends beyond funding to the conditions that allow innovative British businesses to grow and compete internationally.
Goff built LYMA, a British health-tech brand spanning supplements and cold near-infrared laser technology, after a deeply personal experience. Following serious complications after the birth of her daughter, she struggled to recover and was introduced to specialist supplement ingredients that inspired her to develop products of her own.
But securing investment proved difficult. Goff says she approached around 50 potential sources of funding before deciding to remortgage her house to finance the first production run herself. Investors began returning only after the business had launched and established its brand.
She believes her experience reflects a wider problem for British businesses: the UK can generate innovative ideas but struggles to help them reach their full commercial potential.
“The UK is very good for innovation. So it’s very good to create innovation, but it’s not good at commercialising that innovation. Whereas America is very, very good. They are very up to date with scientific technologies; they know how to commercialise innovation, and I think that’s where Britain really falls short,” she says.
Goff points to differences in regulation as one of the obstacles facing businesses like LYMA. She says the US Food and Drug Administration (FDA) offers a process that can adapt to new scientific technologies, while the UK and European frameworks make it harder for the company to communicate the evidence behind some of its products to consumers.
“Our devices are FDA-cleared, and the FDA process that you go through is adaptable for whatever science you are bringing in,” she says. “But in the United Kingdom, you don’t have that.”
The US now accounts for around 70% of LYMA’s business, according to Goff. She argues that Britain risks losing the commercial benefits of its own innovation if businesses find it easier to grow in other markets.
She also criticises the lack of long-term policy stability, saying governments have too often been “more firefighting rather than actually nurturing and laying really robust foundations for the next hundred years”.
Susannah Streeter, Chief Investment Strategist at Wealth Club and host of Founders & Funders, said: “Britain has no shortage of entrepreneurial talent or innovative ideas, but there is a real question about whether we are doing enough to help businesses turn that potential into lasting commercial success.
“Building a successful business takes more than a good idea. It takes capital, conviction and the confidence to keep investing when the road ahead is difficult. Stephen Page’s warning is that entrepreneurs will go where the conditions are right, while Andrew Wolfson’s comments underline the importance of maintaining investor confidence. Lucy Goff’s experience shows how much determination it can take to turn British innovation into a growing international business.
“As the Budget approaches, the Government has an opportunity to strengthen the UK’s appeal as a place to start, scale and invest in businesses. Tax reliefs matter, but so does stability. Entrepreneurs and investors need to be able to make long-term decisions without constantly second-guessing the rules. If Britain wants to retain more of the value created by its innovators, it needs to make it easier for them to turn ideas into thriving businesses here.”
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