Rachel Reeves has been urged by a group of millionaire business owners to raise £14bn from an increase in capital gains tax at this month’s budget, arguing it would have no impact on investment in Britain. Ahead of the chancellor’s set-piece event on 30 October, the group of wealthy investors said increasing the tax rate on asset disposals would help to raise vital funds for public services and would not lead to slower economic growth. In a report by the centre-left IPPR thinktank, which carries influence with the Treasury, the millionaire entrepreneurs said they would welcome an increase in the rate levied on capital gains to match the higher rate of income tax. The report showed that capital gains tax (CGT) was not a primary driver of investment decisions, with entrepreneurs more focused on issues including access to financing, market opportunities, and broader economic conditions. Mark Campbell, the millionaire co-founder of Higgidy pies, said higher rates of CGT would not “scare away real investors” in Britain. “Entrepreneurs don’t think about [it] when they create businesses. [It] would not have stopped us investing in Higgidy,” he said. “The UK needs a fairer tax system to invest in its future, and those of us who’ve benefited the most should contribute more so that we have a healthy society and economy for future entrepreneurs to operate within.” Graham Hobson, the millionaire co-founder of Photobox, a photo printing website, said: “The idea that raising capital gains tax would discourage entrepreneurship is simply a myth. Entrepreneurs are driven by passion, problem-solving, and creating value – not by low taxes.” Julia Davies, a millionaire investor who has backed companies including Osprey outdoor equipment, said: “As an entrepreneur and investor, I’ve never let tax rates dictate my decisions to fund innovation or pursue opportunities.” At present, the top rate of income tax is set at 45%, but most types of capital gain are taxed at 20% and can be as low as 10%. It is levied on the sale of shares, second homes and businesses. The report recommended equalising CGT rates with income tax rates – representing the reinstatement of the system introduced by the Conservative chancellor Nigel Lawson in the 1988 budget. This would entail a rate of 20% for basic rate income tax payers, 40% for the higher rate, and 45% for the additional rate. Earlier this month, the Guardian revealed that Reeves was exploring increasing CGT to a range of 33% to 39% in the budget, as she considers options for raising up to £40bn to meet a “golden rule” to balance day-to-day spending with revenue. However, HMRC analysis suggests that a large increase in CGT rates could end up costing the exchequer money because such a move could lead wealthy individuals to rearrange their tax affairs or leave the country to avoid paying higher rates. The tax raises about £15bn a year, less than 2% of total tax revenue. Paid by 350,000 people, less than 1% of the adult population, as much as two-thirds of all revenue for the exchequer comes from a small subset of super-rich individuals who gain more than £1m. Earlier this summer, HMRC said that while a 1% increase in the higher rates of CGT would raise £100m in 2027-28, that a 10 percentage point increase would actually cut revenues by about £2bn that year. Pranesh Narayanan, research fellow at IPPR, said the tax office had not published the behavioural assumptions behind its analysis, which he said were likely to be outdated, and did not take account of broader reforms to CGT that would be required to raise £14bn. “The recent fearmongering from some that increasing capital gains tax will take the economy back to the stone ages is pure hyperbole,” he said. “We have spoken to multiple millionaires in the last few weeks who have made it clear that equalising capital gains tax with income tax would make absolutely no difference to their investment or entrepreneurial pursuits.” A Treasury spokesperson said: “We do not comment on speculation around tax changes outside of fiscal events.”