John Caudwell and Lord Stuart Rose have added their names to an open letter attacking tax creep on UK businesses, warning that successive rounds of levies and reduced reliefs are making it harder to build companies in Britain. The letter, coordinated by entrepreneur group Helm, urges the Labour government to stop rolling out new charges on founders, specifically targeting dividends, capital gains and business assets.
The signatories include Charlie Mullins, former boss of Pimlico Plumbers, and Luke Johnson, chairman of Gail’s Bakery. Their intervention comes ahead of what the Chancellor, John Healey, has described as a Budget intended to give businesses ‘breathing space’ after the private sector absorbed a heavy share of tax increases under his predecessor.
Rose warns investment has stalled
Lord Rose, the former chairman of Asda and Marks & Spencer, said he had ‘never been more concerned about the cost of doing business’ and that taxes and regulation had become ‘serious impediments to growth and employment’. He gave a concrete illustration of the burden. ‘Employers’ National Insurance alone took £100m a year out of one supermarket,’ Rose said, referring to the impact of former Chancellor Rachel Reeves’ £25bn tax hike in late 2024. ‘Multiply that across the economy and it is easy to see why investment has stalled.’
Caudwell separately told the Telegraph he did not believe Labour were ‘electable’, despite having donated to the party before the last general election. The open letter concludes that a ‘steady creep of tax rises and reductions in entrepreneurial reliefs is making it harder to build and scale a business in the UK’.
Tax creep on UK businesses: the wider picture
The campaign arrives alongside fresh analysis from the Institute of Economic Affairs (IEA), which argues that the tax system has deteriorated over the last 15 years to the point where incentives for investment have been ‘eroded’. Tom Clougherty, former chief of the right-leaning think tank, said that twice raising taxes on investment during periods of economic crisis was a ‘major error, and likely had a chilling effect on growth’.
IEA research suggests levies on investment, covering corporation tax, personal taxes on dividends and capital gains tax, have climbed by 10 percentage points since the Great Financial Crisis of 2008. The analysis blames successive Conservative and Labour governments for targeting investors and workers rather than less productive parts of the economy. Since 2024, the Labour government has cumulatively raised about £65bn in taxes, with more than half impacting businesses.
‘The tax system didn’t cause Britain’s growth slowdown, but it has made bouncing back much harder than it needed to be,’ Clougherty said. He added that the tax system is ‘probably a greater threat to enterprise and initiative today than at any point in the last 35 years’.
Adding weight to the concern over complexity, the IEA highlights research by accountancy body ICAEW suggesting the HMRC handbook has more than tripled in size, from 7,250 pages to about 23,500 pages. The burden on personal income has risen from 44.5 per cent of government revenue in 2000 to 51 per cent of receipts 24 years later, according to the IEA. The withdrawal of the personal allowance for those earning more than £100,000, a measure that now hits 500,000 more people than when it was introduced, is one example of how fiscal drag compounds over time.
On dividend taxation specifically, rates have moved again. According to Alto Accounting, dividend tax now stands at 10.75 per cent at the basic rate and 35.75 per cent at the higher rate, both up 2 percentage points from 2025/26. It is precisely these incremental uplifts that the Helm letter describes as ‘tax creep on UK businesses’: individually small moves that compound into a material drag on founders’ returns.
Not every announcement has been in one direction. According to Grant Thornton, a 20 per cent cut to business rates for pubs, social clubs and live music venues in England was confirmed on 23 July 2026 and is due to take effect from April 2027, a concession that will offer some relief to hospitality operators, even if it does little to address the broader investment tax picture the Helm signatories have in mind.
Healey has said his Budget will offer the private sector room to recover. Whether the measures announced match that ambition is a question the Helm letter, and the IEA’s analysis behind it, have already framed in considerable detail.
