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Britain’s Finance Minister Rachel Reeves has pledged to make the “necessary”, “urgent” and “incredibly tough” choices to restore the country’s economic stability.

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LONDON — British technology bosses and investors are warning that entrepreneurs may be forced to leave the U.K., if the government moves forward with controversial plans to raise capital gains tax on share sales.

Recent media reports have suggested Finance Minister Rachel Reeves is planning to hike capital gains tax (CGT) — which applies to the profit investors make on the sale of an investments — with The Guardian saying the levy could jump to 39%. Last week, U.K. Prime Minister Keir Starmer told Bloomberg that such speculation was “wide of the mark.”

Reeves is expected to announce sweeping fiscal changes during her Oct. 30 budget, as she seeks to close a multi-billion funding gap in public finances.

The government is also planning to increase capital gains tax on shares and other assets by “several percentage points,” the Times reported, meaning that those who sell their stakes in an acquisition, initial public offering or secondary share sale will be taxed on any gain in value.

Reeves also plans to cut the so-called business asset disposal relief (BADR), which allows entrepreneurs to pay a reduced 10% tax on profits from the sale of their firms, Bloomberg found.

CNBC has not been able to independently verify these reports. The Treasury did not immediately respond to a request for comment.

Several entrepreneurs and investors have warned that the U.K. could face an exodus of technology entrepreneurs as a result of the reported tax changes.

In an open letter to Reeves earlier this month, more than 500 entrepreneurs urged the finance minister to resist calls to hike capital gains tax or restrict the business asset disposal relief scheme.

“Higher CGT or any restrictions on BADR would make this relief less competitive at a time when the rest of the world is making their reliefs more competitive,” read the letter, published by The Entrepreneurs Network on Oct. 13.

“It would mean the UK has the second-highest CGT rate in Europe, and jeopardise the success of our country’s startup ecosystem by enormously weakening the incentive individuals have to build businesses.”

The list of signatories includes the likes of Giles Andrews, co-founder of digital bank Zopa, Rishi Khosla, CEO of financing platform OakNorth, and Victor Riparbelli, boss of artificial intelligence firm Synthesia.

They suggested that the plans would make it harder for entrepreneurs to build businesses in the U.K. — or indeed, force entrepreneur out of the country.

“By discouraging entrepreneurs from starting and growing their businesses, HM Treasury could well end up lowering the tax take overall,” the letter said.

Wiz opened London office to double down on UK market, co-founder says

“I’ve noticed a rising sense of stress in the U.K. tech ecosystem over proposals like this. If implemented, such a move would send a deeply negative signal,” Adam French, partner at seed investors Antler, told CNBC by email.

“There is a real risk of complacency in U.K. tech, in tandem with increasing competition from Paris and Berlin for talent, and a brain drain to the U.S.,” French added.

Harry Stebbings, a venture capitalist known for popular tech podcast “The Twenty Minute VC,” told The Guardian newspaper last week that entrepreneurs would leave the U.K. if the government raises capital gains tax.

Calling the government’s plan on capital gains tax the “biggest” issue for entrepreneurs, Stebbings said: “I know fewer entrepreneurs will be here. They will leave en masse.”

Not everyone agrees that capital gains tax shouldn’t be increased to raise public finances.

In a report by the center-left Institute for Public Policy Research published last week, a group of millionaire business owners said they would welcome an increase in the rate levied on capital gains to match the higher rate of income tax.

The analysis found that capital gains tax was not a primary driver of investment decisions, with entrepreneurs more focused on issues like access to financing, market opportunities and broader economic conditions.

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Bitcoin drops below $98,000 as Treasury yields pressure risk assets

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Bitcoin drops below ,000 as Treasury yields pressure risk assets

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Bitcoin slumped on Tuesday as a spike in Treasury yields weighed on risk assets broadly.

The price of the flagship cryptocurrency was last lower by 4.8% at $97,183.80, according to Coin Metrics. The broader market of cryptocurrencies, as measured by the CoinDesk 20 index, dropped more than 5%.

Crypto stocks Coinbase and MicroStrategy fell more than 7% and 9%, respectively. Bitcoin miners Mara Holdings and Core Scientific were down about 5% each.

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Bitcoin drops below $98,000

The moves followed a sudden increase in the 10-year U.S. Treasury yield after data released by the Institute for Supply Management reflected faster-than-expected growth in the U.S. services sector in December, adding to concerns about stickier inflation. Rising yields tend to pressure growth oriented risk assets.

Bitcoin traded above $102,000 on Monday and is widely expected to about double this year from that level. Investors are hopeful that clearer regulation will support digital asset prices and in turn benefit stocks like Coinbase and Robinhood.

However, uncertainty about the path of Federal Reserve interest rate cuts could put bumps in the road for crypto prices. In December, the central bank signaled that although it was cutting rates a third time, it may do fewer rate cuts in 2025 than investors had anticipated. Historically, rate cuts have had a positive effect on bitcoin price while hikes have had a negative impact.

Bitcoin is up more than 3% since the start of the year. It posted a 120% gain for 2024.

Don’t miss these cryptocurrency insights from CNBC Pro:

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Hims & Hers donates $1 million to Trump’s inauguration fund

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Hims & Hers donates  million to Trump's inauguration fund

Hims & Hers Health has donated $1 million to President-elect Donald Trump’s inauguration fund, CNBC confirmed Tuesday.

The company, which offers a range of direct-to-consumer treatments for conditions like weight loss, erectile dysfunction and hair loss, is the latest in a string of tech companies that have tried to curry favor with the incoming administration. OpenAI CEO Sam Altman and Meta both announced $1 million donations to the inaugural fund late last year, and Amazon and Apple CEO Tim Cook have also reportedly contributed.

“At Hims & Hers, we stand with leaders and advocates who are committed to improving America’s broken healthcare system,” the company said in a statement to CNBC.

Axios first reported Hims & Hers’ donation.

Hims & Hers was a breakout star in the digital health sector last year, largely thanks to the success of its popular new weight loss offering.

The company began prescribing compounded semaglutide through its platform in May after launching a weight loss program late in 2023. Semaglutide is the active ingredient in Novo Nordisk‘s blockbuster medications Ozempic and Wegovy, which can cost around $1,000 a month without insurance. Compounded semaglutide is a cheaper, custom-made alternative to the brand drugs and can be produced when the brand-name treatments are in shortage.

The future of compounded GLP-1s in the U.S. is not entirely clear, especially as members of Trump’s circle have expressed conflicting opinions about the drugs more broadly. Robert F. Kennedy Jr.,  Trump’s pick to lead the Department of Health and Human Services, has criticized GLP-1s. He told CNBC in an interview that “the first line of response” to obesity should be lifestyle changes, though he added that “GLP drugs have a place.”

Dr. Marty Makary, Trump’s pick to lead the Food and Drug Administration, has served as an executive of the telehealth company Sesame, which connects consumers to physicians who can prescribe compounded GLP-1s. However, Makary’s role at Sesame has been mostly ceremonial in recent years. 

Elon Musk, the Tesla CEO who has been a close confidant of Trump’s since the election, has openly expressed his support for the medications.

“Nothing would do more to improve the health, lifespan and quality of life for Americans than making GLP inhibitors super low cost to the public,” Musk wrote in a post on his social media platform X in December.

At an event with reporters in New York City late last year, which was attended by CNBC, Hims & Hers said it would work with the incoming administration and share the company’s point of view about the value of the medications.

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Meta scraps fact-checking program, brings back political content

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Meta scraps fact-checking program, brings back political content

Meta on Tuesday announced it will eliminate its third-party fact-checking program to “restore free expression” and move to a “Community Notes” model, similar to the system that exists on Elon Musk‘s platform X.

The company said Community Notes will be written and rated by contributing users to provide more context to posts across its platforms, and the feature will roll out in the U.S. over the next couple of months. The announcement marks Meta’s latest attempt to smooth over relations with Republican President-elect Donald Trump before he takes office.

“We’ve reached a point where it’s just too many mistakes, and too much censorship,” Meta CEO Mark Zuckerberg said Tuesday in a video announcement. “The recent elections also feel like a cultural tipping point towards once again prioritizing speech, so we’re going to get back to our roots and focus on reducing mistakes, simplifying our polices and restoring free expression on our platforms.”

Zuckerberg said the third-party fact-checkers have been “too politically biased” and have “destroyed more trust than they’ve created, especially in the U.S.”

Meta said it will simplify its content policies by removing restrictions on subjects like immigration and gender and implement a new approach to policy enforcement that will focus on illegal and high-severity violations. The company is moving its trust and safety and content moderation teams from California, a historically Democratic state, to Texas, a historically Republican state.

“We’re going to work with President Trump to push back on governments around the world that are going after American companies and pushing to censor more,” Zuckerberg said.

Federal Trade Commission Chair Lina Khan addressed Meta’s announcement in an interview Tuesday on CNBC’s “Squawk Box,” stating, “We should have an economy where the decisions of a single company or a single executive are not having extraordinary impact on speech online.”

Joel Kaplan, Meta’s head of global policy, appeared Tuesday on Fox News’ “Fox and Friends” and said Meta thinks the Community Notes system on Musk’s platform X has been working “really well.” Musk, who has been a vocal advocate for Trump online and donated millions of dollars to his campaign, has been in close contact with the president-elect since the election.

Last week, Meta said that Kaplan would become the company’s top policy officer, succeeding Nick Clegg, who was a former British deputy prime minister and a leader of Britain’s centrist Liberal Democrats party.

Kaplan, who has held several policy-related positions at Meta since joining the company in 2011 when it was still named Facebook, is well known within the Republican Party. He was a White House deputy chief of staff under former President George W. Bush and also once worked as a law clerk for former Supreme Court Justice Antonin Scalia.

In December, Kaplan revealed in a Facebook post that he joined Vice President-elect JD Vance and Trump during their recent visit at the New York Stock Exchange.

“We want to make it so that, bottom line, if you can say it on TV, you say it on the floor of Congress, you certainly ought to be able to say it on Facebook and Instagram without fear of censorship,” Kaplan said Tuesday.

Meta’s Oversight Board, which provides an independent check of the company’s content moderation, lauded the company’s changes on Tuesday.

“The Oversight Board welcomes the news that Meta will revise its approach to fact-checking, with the goal of finding a scalable solution to enhance trust, free speech and user voice on its platforms,” the board told CNBC in a statement, adding that “specifically in the United States, rightly or wrongly, Meta’s previous approach has been perceived as politically biased by many of its users.”

Prominent Republican lawmakers have previously criticized Meta and other technology companies for allegations regarding the censorship of conservative voices on their respective platforms. For instance, House Judiciary Chair Jim Jordan, R-Ohio, subpoenaed Zuckerberg and other tech CEOs in 2023 as part of a probe to “understand how and to what extent the Executive Branch coerced and colluded with companies and other intermediaries to censor speech.”

Zuckerberg has had a rocky relationship with Trump over the years, with the president-elect more recently describing Facebook as an “enemy of the people” in a March interview with CNBC. Meta levied a two-year suspension on Trump’s Facebook and Instagram accounts in 2021 shortly after the company determined that the former president’s actions following the Jan. 6 insurrection in Washington, D.C., could potentially incite more violence.

In 2023, Trump was able to regain access to his Facebook and Instagram accounts, but he also faced some restrictions and potential penalties if he were to violate the company’s community guidelines. Meta eventually removed Trump’s account-related restrictions in July during the lead-up to the 2024 U.S. presidential election.

The company has taken additional steps to appease the incoming administration in recent months. On Monday, Meta announced Dana White, CEO of the Ultimate Fighting Championship and a longtime friend of Trump, is joining its board.

Following Trump’s presidential victory in November, Zuckerberg joined a number of other big technology executives who visited the president-elect at the Mar-a-Lago resort in Palm Beach, Florida, and in December, Meta confirmed a $1 million donation to Trump’s inaugural fund.

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