Rathbones warns funding gap hampers UK startups' ability to scale
EWU•Rathbones warned that UK venture capital investment was almost 25% below US levels in 2023-2025, adjusted for economic size, and urged investment-led tax reforms. Its report said pension funds provide 10% of UK venture capital, compared with 72% in the US.
1. Funding and tax proposals
Rathbones urged investment-led UK tax reforms in its October 26, 2026 report, warning that higher taxes could weaken growth. It said later-stage funding was particularly weak and that pension funds provide just 10% of UK venture capital, compared with 72% in the US. The report estimated that abolishing Stamp Duty Land Tax on primary residences could increase transactions by 16%, potentially adding almost 11,000 homes annually; a 10-percentage-point increase in the higher capital gains tax rate could reduce 2027-28 tax revenue by more than £2 billion.
