Rachel Reeves has been urged to give a stamp duty holiday for companies when they list on London’s stock exchange as her Taskforce looks for ways to boost the beleaguered bourse.
Representatives of the chancellor’s listings taskforce, which she set up after her Mansion House speech in July, have floated an up-to-five-year break on stamp duty.
Stamp duty, which is levied at 0.5 per cent of the value of a transaction when investors buy shares, was described as a “psychological barrier” by Charles Hall, head of research at investment bank Peel Hunt.
Hall told The Sunday Times that duty relief would address concerns aired by fintechs about the tax on share trading: “A lot of fintechs that are thinking of listing feel very strongly about stamp duty”.
The City faces competition from America and the UAE for fintech investment, which are both fruitful sources fundraising.
The capital’s market was dealt a crushing blow after money transfer firm Wise transferred its primary listing to the US as the firm cited the “deeper liquidity” offered in New York.
It has seen a string of high profile departures already this year, while 88 firms either delisted or transferred their primary listing in 2024 – the biggest exodus since the financial crisis.
While stamp duty raises about £4bn a year for the Treasury, proponents of the break have argued that London’s extremely low rate of new listings mean that the tax take would be essentially unaffected.
Sue Noffke, head of UK equities at investment manager Schroders, told The Sunday Times: “There would be a bang for your buck in terms of what it’s signalling. The attractiveness of what it could do for IPOs would be really helpful.”
Charlie Walker, deputy chief executive of the London Stock Exchange, said stamp duty “disincentives investment in UK companies and “we would welcome a review of stamp duty to make sure it is fit for purpose”.
City AM has contacted the Treasury for comment.
