Rachel Reeves has been warned against imposing an exit tax on people emigrating from the UK as it would push investment away from Britain. More than 150 of the nation’s most successful business leaders and investors have written to the Chancellor, urging her to reconsider the levy as it would trigger a mass exodus of wealthy Brits.

In the letter, the founders say the tax would “not only tell founders that their ideas and innovations aren’t welcome, but that they should either get out early or not come at all”. At the moment, any emigrant can sell off their assets in Britain after leaving without paying capital gains tax, which stands at 20%. However, under Ms Reeves’ plan, they would be required to pay this levy at the point of departure, with an option to delay the payment.

The Chancellor hopes the charge would raise around £2 billion as she scrambles to plug the multi-billion hole in public finances before the Budget. The letter warned that the exit tax “would amount to taxing the symptom of failure, holding founders for ransom rather than fixing the issues that make them want to stay”.

Alex Stephany is one of the signatories, who is the CEO of AI company Beam, and previously backed Labour in the election last year.

He said he hoped the Government would “capitalise on what they inherited and improve the UK as a place to start and scale a business”.

“I don’t think that is happening, I think we’re losing momentum,” he said.

Harry Stebbings, leader of one of Europe’s largest venture capital funds, said the move would prompt an investor exodus, as it would be “the final nail in the coffin” for them.

“It shows the complete lack of understanding that we have already lost the most wealthy people, and this will be the final nail in the coffin that will make those few stragglers who remain — including me — leave,” he told The Times.

Mr Stebbings revealed that, in the last few days alone, the business leader had 15 founders of UK companies telling him of their plans to leave the country.

He added that the exit tax highlights that Labour is willing to “encroach on freedom of movement” for businesses.

Executive director Dom Hallas, who organised the letter to the Chancellor, said: “The strength of feeling from founders of the UK’s most innovative businesses is clear — anything that punishes them for success instead of working to keep them growing, hiring and creating value in the UK will only serve to make things in the UK worse. Any action at the budget should be focused on motivating entrepreneurs to stay here, not holding them for ransom.”