Business owners are leaving Britain for other countries as Rachel Reeves’s “doomsday” Budget looms.
The Chancellor has said she wants to oversee “pro-growth” measures that will boost the economy and help businesses to “thrive”.
But in the past 12 months, 6,100 company directors have left the UK, up from 4,300 during the same period the previous year – an increase of 42 per cent.
The figures are drawn from Companies House filings, which list the number of directors with significant control of their businesses who have changed their country of residence from the UK to a foreign nation.
Business leaders point to a number of changes introduced under Labour, including clamping down on non-doms, limiting inheritance tax reliefs for family businesses and raising capital gains tax, as reasons for the exodus.
Andrew Griffiths, the shadow business secretary, said: “Rachel Reeves has created a hostile environment for wealth creators, company directors and those leading businesses. She is being positively reckless about this.
“It is a colossal error to have such a doom-laden run-up to the Budget. Whatever she says on Wednesday, much of the damage has already been done.
“It seems very likely that we are heading for a doomsday Budget. With an exodus of businesses already taking place, there is every indication that it will only get worse. This is going to have a ruinous effect on the country.”
The most popular destination for company directors is the United Arab Emirates, followed by Spain, with the US in third place, according to analysis by The Telegraph.
In 2023-24, about 325 directors moved to the UAE. In 2024-25, the number rose to 571.
The number of directors moving to Spain increased by 35.2 per cent, from 332 to 449. And the number of directors who moved to the US increased by 27 per cent from 294 to 373.
Anna Leach, the chief economist at the Institute of Directors, said that various government policies over the past year had prompted company leaders to move abroad.
“More recently, it would have been exacerbated by rumours of an exit tax, even though it was then rumoured to be dropped,” said Ms Leach. “Either way, it doesn’t look like rational policy-making, and why would you want to stay in a country that doesn’t make rational policy decisions?”
Ms Leach added that over the past few months, there had “been a sense of building crisis among certain parts of the business population, mostly at the smaller end”.
She said: “After tax increases, the employment rights bill is the next area of concern. You can’t keep massively jacking up tax that particularly impacts a sector that you want to drive a lot of growth in.
“Now, when you add in the slightly insane run-up to the Budget – the hokey-cokey approach to policy-making – it just adds to, in some ways, a feeling of despair over the policy environment.
“Businesses were promised policy stability and a long-term approach. The current environment couldn’t be further from that.”
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Craig Beaumont, the executive director of the Federation of Small Businesses, said: “If you are an entrepreneur, you are looking for opportunities, wanting to find where you can make a living.
“This is clearly a group who thinks they can make more money elsewhere. It is a very sobering thought. The Government needs to have a pro-enterprise strategy.”
A Treasury spokesman said: “If you make your home in Britain, then you should pay your taxes here too. That is why we abolished the non-dom tax status to invest in our public services, including the NHS. But the UK remains a highly attractive place to live and invest.
“Our main capital gains tax rate is lower than any other G7 European country and our new residence-based regime is simpler and more attractive than the previous one, whilst it also addresses tax system unfairness so every long-term resident pays their taxes here.”
