The Government must scrap stamp duty on share trading to boost the economy, according to a top UK investment firm. 

Matt Beesley, chief executive of Jupiter Asset Management, said there was an ‘urgent need’ for ministers to encourage stock market investment.

Putting an end to the duty would boost the City for years to come and represents a ‘forward thinking move that we, like many other investors, would cheer,’ he added.

Investors pay 0.5 per cent in stamp duty on UK-listed shares they buy – but this does not apply to stocks bought in foreign firms.

It means a saver who buys £10,000 of shares in a FTSE 100 firm such as Rolls-Royce pays £50 in tax – but would pay nothing at all to make the same investment in New York-listed Nvidia.

A slew of City investment firms including Abrdn, AJ Bell, Hargreaves Lansdown and Interactive Investor have slammed the levy.

The clamour over stamp duty comes amid mounting fears that low valuations have left London-listed stocks vulnerable to predators looking to snap up firms on the cheap.

The London Stock Exchange has also seen an exodus of big companies moving to New York.

Beesley said: ‘The long-term benefits of removing this tax would likely more than offset the costs, with stamp duty on share trading accounting for less than half of one per cent of all UK tax receipts.’

Share buying ‘leads to growth, which leads to jobs, which creates wealth’, he added.

A Treasury spokesman said: ‘There’s no time to waste to fix the foundations of the economy, which is why we’ve taken immediate action to boost investment and economic growth.’