‘Bonkers’ founders’ relief criticised over rules that could punish startup growth

John Healey’s flagship tax break for entrepreneurs has been branded bonkers by leading economists, who warn its restrictive rules could punish startup growth and encourage founders to make decisions that damage productivity. The new Founders’ Relief offers a 10 per cent capital gains tax rate on up to £10m of lifetime gains, but its complex eligibility requirements have sparked a backlash just days after the Chancellor unveiled the scheme in his Budget. Helen Miller, director of the Institute for Fiscal Studies (IFS), warned that the relief could incentivise precisely the wrong behaviour. The more I’ve dug into the details of Founders’ Relief, the more bonkers I think it is , she wrote on X. It incentivises entrepreneurs to change behaviour in ways that would be bad for productivity . Tax expert Dan Neidle also argued that no entrepreneur could realistically plan around a tax incentive that might change before they sell their business. Speaking on ITV’s Peston, he sa