Over 1,500 entrepreneurs have signed a letter directed at Rachel Reeves, urging her to rethink upcoming tax alterations poised to impact business owners, which are expected to be detailed in the forthcoming budget announcement next week.

The correspondence, reviewed by The Times, warns that proposed modifications to business asset disposal relief—previously known as entrepreneurs’ relief—could significantly jeopardize the innovative spirit that has fueled economic growth in the UK.

Currently, this relief permits individuals to benefit from a reduced tax rate of 10% on qualifying gains, capped at £1 million throughout their lifetime. There is growing concern that this relief may be in jeopardy as the chancellor seeks avenues to minimize expenditures and address public finance issues in the budget set for October 30.

The initiative was spearheaded by Fearless Adventures, a venture capital firm co-founded by Dominic McGregor, who is also known for establishing the marketing agency Social Chain alongside Steven Bartlett, a prominent figure from Dragons’ Den.

Among the notable signatories are influential entrepreneurs such as Peter Roberts, founder of Puregym; Will Butler-Adams, managing director of Brompton, the folding bicycle manufacturer; Leonard Picardo, a former executive at Deliveroo; and Jennifer Roebuck, co-founder of the Tortilla Mexican restaurant chain.

The signers expressed their awareness of the necessity for tax funding to support vital public services, including the NHS and infrastructure, but emphasized that abolishing this relief would convey a detrimental message to both entrepreneurs and investors.

They contend that this tax relief acts as a critical incentive for launching new ventures and maintaining that without it, equating entrepreneurial gains with ordinary income tax rates would make the UK substantially less appealing for business development.

Beyond calling for the retention of this relief, the letter also requests Reeves to consider restoring the lifetime limit to £10 million, which was reduced to £1 million in 2020 by former Chancellor Rishi Sunak due to concerns regarding its impact and cost.

This incentive has been labeled by the Resolution Foundation as “Britain’s worst tax relief,” while the Institute for Fiscal Studies characterized it as “poorly targeted” and suggested its elimination.

Revising the relief to offer more favorable terms would ensure that individuals who undertake substantial risks to foster economic advancement and innovation receive appropriate acknowledgment, stated the letter, which was also sent to Prime Minister Sir Keir Starmer.

This petition follows a warning from the Federation of Small Businesses (FSB) about the harmful effects of increased taxation on entrepreneurs involved in selling their businesses, which may hinder entrepreneurial activity.

Tina McKenzie, chairwoman of policy for the FSB, remarked that eliminating this relief would particularly impact everyday entrepreneurs, such as restaurant owners, car mechanics, and jewelry designers, who might hesitate to embark on new ventures without the incentive provided by this relief.

“Numerous entrepreneurs stake their life savings into their businesses, making them vulnerable if they fail to achieve a fair sale,” she added.