The UK should remove stamp duty on share purchases and introduce tax incentives for R&D to support its position as a leading player in the financial markets, according to UK Finance.
The trade association for the UK banking and financial services sector said the UK remains a top tier global capital markets centre but this position is being challenged and without further action, the potential for decline is clear.
"Capital markets play a critical role in supporting the UK economy," the report - which was compiled in conjunction with EY - said.
"They enable and support lending and investing – from large multinational companies through to mortgages, savings products and our pensions. Having a strong and dynamic market is therefore a strategic and economic priority for the UK."
Collective and harmonised action is required to reverse adverse trends and set the UK’s markets on a new path, it felt.
UK Finance believes the UK needs to address the structural challenges hindering UK growth companies, reboot the nation’s culture towards financial empowerment and entrepreneurship, continue to improve ‘the plumbing’ of the UK’s capital markets and reinforce the UK as a destination of choice.
Actions identified to assist this include introducing larger and sustained tax-based incentives for R&D for targeted sectors and incentivise UK equity investment by removing the 0.5% stamp duty on share purchases.