Fintechs Urge UK to Scrap Stamp Duty on Shares to Revive London IPO Market
- The group representing the UK's fastest-growing fintech companies has urged the government to eliminate stamp duty on shares entirely, arguing that the 0.5 per cent levy holds back...
- Innovate Finance acknowledged that the three-year stamp duty holiday for new listings introduced by Rachel Reeves in her 2025 Budget was a welcome step.
- Concerns over market vulnerability coincide with a wave of foreign takeovers sweeping the London market.
The group representing the UK’s fastest-growing fintech companies has urged the government to eliminate stamp duty on shares entirely, arguing that the 0.5 per cent levy holds back the London Stock Exchange and exposes domestic firms to foreign takeovers. According to a new report from Innovate Finance, whose members include Revolut, Monzo, and Zilch, scrapping the tax would remove a persistent competitive disadvantage and encourage greater domestic investment in British equities.
Fintech Push Follows Limited Impact of Chancellor Budget Holiday
Innovate Finance acknowledged that the three-year stamp duty holiday for new listings introduced by Rachel Reeves in her 2025 Budget was a welcome step. However, the organization noted that the policy has so far failed to trigger a wave of new public offerings in the City. The fintech body stated in its report that abolishing the tax completely is now necessary to reverse the decline in British ownership of UK companies and strengthen London’s appeal as a primary listing venue.
The push for broader tax relief comes as HM Revenue and Customs (HMRC) collects billions from the levy. Total tax receipts for the shares duty rose 35 per cent in the 2024 to 2025 financial year, with HMRC collecting roughly £4.3bn. Despite previous policy interventions, pressure remains high on policymakers to improve conditions for companies considering a float. Officials have actively courted the fintech sector, many of whose firms harbor public ambitions, to persuade them to list in London.
Critics of the current tax structure argue that it makes raising capital locally more expensive and dissuades domestic investors. Previously, the chief executive of fintech unicorn Thought Machine informed City AM that the prior budget adjustments fell short of swaying anyone’s decision on whether or not to pursue a UK listing. Innovate Finance added that the levy exposes UK-listed firms to a heavy reliance on overseas capital, making them vulnerable to takeovers and corporate relocation.
Rising Foreign Takeovers Underscore Market Pressures
Concerns over market vulnerability coincide with a wave of foreign takeovers sweeping the London market. September kicked off with a single morning featuring three separate London-listed firms accepting acquisition bids to be taken private. FTSE 250 members Bodycote and Gamma Communications, alongside energy firm Capricorn, each agreed to take-private deals worth a combined £3bn.
Comparative reporting highlights how London continues to face intense international competition for initial public offerings. While US markets attract major technology and biotechnology listings through deeper investor pools, financial hubs like Singapore and Hong Kong maintain streamlined administrative fees and impose no stamp duty on share transactions. In contrast, London’s annual IPO count dropped from 93 in 2021 to 37 in 2024, marking a 60 per cent decline according to broader market data cited in financial coverage.
Eliminating the share levy on UK equities would mitigate this disadvantage, foster heightened local investment, boost London’s appeal for public floats, and help turn around the downward trend in domestic ownership of British businesses.
Innovate Finance