The Group representing the UK’s fastest growing fintech companies has called for the government to scrap stamp duty on shares to boost London’s flagging initial public offering market.
Innovate Finance – which counts Revolut, Monzo and Zitch among its members – has called for the Treasury to ditch the 0.5 per cent levy on UK stocks to boost British equity ownership and revive the London Stock Exchange’s appeal.
Ousted Chancellor Rachel Reeves introduced a three-year stamp duty holiday for new listings in her 2025 budget, which the body described as “welcome” but the move has failed to so far translate into new listings.
“Now is the time to abolish stamp duty on UK listed shares in entirety,” Innovate Finance said in a new report.
“Abolishing stamp duty on UK shares would remove this competitive disadvantage, encourage greater domestic investment, strengthen London’s attractiveness for IPO’s and help reverse the decline in British ownership of UK companies.”
Tax receipts for the shares levy rose 35 per cent in the 2024 to 2025 financial year, totalling some £4.3 billion. Despite Reeves’ intervention in her final Budget, pressure has remained high on policymakers to improve conditions for companies considering a float in the City.
Officials have courted the fintech industry – many of which are vocal about their ambitions for a public debut – in hopes of luring them towards a London listing.
The boss of fintech unicorn Thought Machine previously said that Reeves’ changes were not “big enough to really change anybody’s mind either for or against” listing in the UK. Innovate Finance said the tax made raising capital in the UK more expensive and dissuaded domestic investment.
Meanwhile – UK equity funds have been hit with another month of outflows after investors dumped stocks in favour of cash and bonds. Investors withdrew a net £601 million from UK stock funds during August a broader £315 million net outflow across global equity strategies.
The retreat marks the fourth consecutive month of net selling globally and the 14th month of UK equity outflows over the past 15, according to the Latest Fund Flow Index from funds network Calastone. Since June 2025, investors have pulled £15.16 billion from equity funds.
European stock funds registered £145 million of outflows while North American funds lost around £3 million. Edward Glyn, head of Global markets at Calastone, said selling in the UK had been compounded by caution over potential tax hikes at the Budget this month..
“Continuous Budget speculation is adding to that caution. If investors believe capital gains and pension tax breaks are in the firing line, some of them have a reason to act now rather than risk delay,” he said.
Chancellor John Healey did little to quash Budget speculation in a speech last month where he refused to rule out tax hikes in the forthcoming Budget on numerous occasions. Healey is facing amplified pressure from the global bound rout that has sent borrowing costs soaring. Some economists have forecast that the £23.6 billion left in fiscal headroom could be slashed in half following downward pressure on gilts.
August, according to latest figures, marked the strongest month for money market funds since November, while bond inflows continue to attract healthy sums, Glyn added. Instead of abandoning financial markets entirely, capital was being re-routed into fixed income, money markets and real assets offering steadier income and downside protection, he said.
Safe-haven money market funds, which invest almost exclusively in short-term, high-quality debt issued by governments and top-rated financial institutions, enjoyed their strongest monthly inflow since November taking in a net £364 million. This was double the 12-month average.
Meanwhile, bond funds landed £407 million in net new capital, securing its fourth straight month of positive inflows. Cash and fixed income strategies combined have absorbed £8.7 billion since equity outflows began last summer.
Oman Observer is now on the WhatsApp channel. Click here
