Revolut’s address matters more than its CEO’s
The UK government should make sure the fintech stays in the country, even if its founder Nik Storonsky didn’t
Sure, low taxes are not the only reason a person might move to the United Arab Emirates. There is also winter sun and sand-dune quad biking. But a looser approach to taxing enormous wealth probably helps — especially for entrepreneurs facing a potential multibillion pound bill from His Majesty’s Revenue & Customs.
One such is Nik Storonsky, co-founder and chief executive of upstart UK bank Revolut. He is the beneficiary of an Elon Musk-style pay package that, in the hands of a UK resident, could theoretically result in over £5bn in taxes, should all of its targets be hit and the proceeds treated as income.
Storonsky’s decampment to the Middle East may then look, at first glance, like evidence that the UK is chasing away its best and brightest through counter-productive tax policies. Such fears are overblown. Just a few weeks earlier Revolut opened a new 113,000 sq ft London headquarters.
Certainly it would have been preferable, from the UK Treasury’s perspective, if Storonsky stuck around. He reportedly sold more than £150mn worth of shares last year; assuming that was almost all capital gains, it could net the tax authorities more than £36mn. Meanwhile his share-based pay is taxed as income, and therefore at a higher rate, so the bill for his future bonus could be proportionally much larger.
But billionaires are mobile; it isn’t obvious the government could have acted differently. Treating share awards as capital gains would create a giant loophole. The UK’s 24 per cent capital gains rate is higher than the oil-rich UAE — where it is zero — but in line with most international peers.
Anxiety about the very wealthy moving abroad has increased since the UK abolished its non-dom regime, which gave tax advantages to people who were resident in the country but who said their main long-term home was elsewhere. But that would make no difference here, since it only protected foreign assets — not shares and income from a UK company.
The more important objective for the government should be to make sure that Revolut stays put, even if its founder didn’t. The bank paid more than £250mn in UK corporation tax last year, a figure that will rise if it manages to reach Storonsky’s ambitious targets. And that’s before considering the impact of payroll taxes and the multiplier effect created by the consumption habits of well-paid employees.
All told, British banks contributed £25bn in employment taxes in the 2024 tax year, according to industry group UK Finance — more than double the entire take from capital gains tax. If Revolut helps drive that number substantially higher, making it easier for one CEO to sustain a year-round tan — and a low tax bill — would be a price worth paying.