Rumours lucrative tax break will be cut has weighed on the AIM market. AIM market already faces weak liquidity and undervaluation woesRumoured plans to axe a lucrative tax break could leave more companies vulnerable to takeover, further diminishing London's shrinking small-cap market, experts have warned.
Reeves is said to be considering a a cut to business rates relief for AIM stocks, stripping inheritance tax benefit driving up to 15% of the market's liquidityProminent firms including mixer maker Fevertree, travel firm Jet2 and Mothercare recently wrote to the Chancellor, urging 'clear support' for business relief on inheritance tax.
London Stock Exchange Group says AIM is 'the world's most successful and established market for dynamic high-growth companies', which benefit from access to 'a diverse set of investors and a supportive advisory community, who understand the needs of entrepreneurial businesses'. Read More Capital Gains Tax hike will cripple investment, Peel Hunt boss warns as Budget anxiety grips the City A separate report from New Financial shows that more smaller listed companies left the UK stock market than joined it in seven of the past ten years.
He said: 'If business relief goes this does not just impact those who can afford to invest but everyone else associated with small companies within the private sector, which cannot rely on private equity funds or Government grants.' Bullas said policy uncertainty has been a cloud over UK businesses and consumers, who 'will feel a lot better once they know what the Government is planning', and are well placed for growth once it has cleared.'If it's an increase in national insurance, for example – yes that is a tax they will have to fund at the end of the day, but businesses have dealt with change because that's what they do.