Influential City group calls on next government to review stamp duty on shares

Speaking out: Stock Exchange boss Julia Hoggett has described the tax as ‘pernicious’

An influential City group has called on the next government to review stamp duty on shares within 100 days of taking power.

TheCityUK said the tax ‘places the UK at a competitive disadvantage’ as it listed its demands ahead of next month’s election.

Reform of the duty could boost investment in London-listed stocks at a crucial time for the exchange, the financial services body said.

The group joins a chorus of City heavyweights who have called for the levy to be ditched.

The tax charges investors 0.5 per cent when buying British shares but nothing if they put money into foreign firms.

Earlier this week, the head of the Investment Association said scrapping stamp duty on shares was an ‘obvious’ way to boost UK equities.

‘It’s one of the highest in the world and reform would bring greater market attractiveness,’ Chris Cummings, chief executive of the management trade body, said.

Meanwhile, London Stock Exchange boss Julia Hoggett has described the tax as ‘pernicious’ and former Abrdn chief Stephen Bird has said it is ‘as unpatriotic as it is economically destructive’.

The tax has been blamed for contributing to the decline of London’s ailing stock market, which has suffered a flurry of takeover offers and firms leaving to list in the US.

A TheCityUK spokesman said the next government should ‘review the future of stamp duty on trading to incentivise greater UK institutional and retail investment into UK equities’. The spokesman said: ‘As a direct tax on liquidity, it places the UK at a competitive disadvantage.’

Other recommendations for the first 100 days include incentivising greater UK investment in shares in UK companies and developing a strategic plan to drive economic growth.

TheCityUK chief executive Miles Celic said: ‘Financial and related professional services are the pulse of the UK economy.

‘The industry is a major national employer, supports people at every stage of their life, and is an enabler of cross-economy growth.

‘We want to see a new era of policy certainty and collaboration between government and industry to ensure it can make an even greater contribution to driving investment, innovation and growth across the country.’