Stamp duty on share purchases has been dubbed as big of a deterrent to investment in the UK as Brexit, research has found.

The recent survey conducted by YouGov on behalf of Etoro, a social investing platform, highlighted that 81 per cent of respondents were unaware of the stamp duty reserve tax (SDRT) charged when purchasing British stocks. It is expected that the taxman will pocket nearly £4bn from stamp duty on UK stock sales this year.

Investors in UK stocks pay 0.5 per cent on stock transactions over £1,000. For example, for £100,000 transactions, a stamp duty tax of £500 would have to be paid. When the investors were questioned on what the biggest deterrents to UK investments are, stamp duty was cited to be as big of a barrier as Brexit.

Furthermore, one in five said they would be less likely to invest in UK companies knowing they had to pay stamp duty on the stocks, while 19 per cent stated they would be less inclined to invest in UK stocks post-Brexit.

Etoro found that the income the government earned from the SDRT increased continuously year-on-year from 2002 to the start of 2008, when it took a steep stumble as a result of the global financial crisis, plummeting by 20 per cent.

The declined continued for a further six years, before the receipts eventually rose significantly, with stable year-on-year growth being recorded since then. In the 2017/18 tax year, SDRT netted the government £3.5m.

More than 50 per cent of the respondents said they would support scrapping the tax.

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