The warning is prompted by AstraZeneca’s decision to upgrade its US listing. As the FTSE 100’s largest company, this move alone is projected to cost the Treasury £200 million in lost tax receipts as a greater proportion of its shares are traded in the US, where no such tax exists.

Peel Hunt argues that if AstraZeneca’s move proves successful, it could not only lead the pharmaceutical giant to abandon its London listing entirely but also encourage other FTSE 100 companies to follow suit. Such a domino effect would severely erode London’s status as a leading financial centre and eliminate the £4.5 billion raised annually from the tax.

Charles Hall, Peel Hunt’s head of research, stated that AstraZeneca’s move could reduce stamp duty receipts by 5% on its own. “Assuming AstraZeneca has a positive experience, we believe that other companies will follow,” he said, adding that company boards “would be negligent if they did not consider this”.

Hall has proposed abolishing the duty altogether, suggesting the policy could create a net gain for the Treasury. He contends that the loss in stamp duty revenue would be more than offset by a rise in equity valuations, which would in turn increase receipts from Capital Gains Tax.

“The proposed changes from AstraZeneca mean that this shifts from being a niche topic to an essential item for the government to address,” Mr Hall concluded. He framed the issue as a clear choice: either preserve the UK’s status as a leading global equity market or risk losing its largest companies and the significant value they contribute to the economy.