Sir James Dyson has strongly criticised Chancellor Rachel Reeves’ latest Budget, describing the new inheritance tax policy as a “spiteful” move that threatens the future of family businesses in the UK.

Under the changes, family-owned businesses and farms worth over £1 million will face a 20 per cent inheritance tax starting in April 2026, a measure Dyson argues could lead to the “death of entrepreneurship” and dismantle the foundation of the British economy.

Writing in The Times, Dyson accused Reeves of “killing off established family businesses” with the so-called “Family Death Tax,” cautioning that this policy undermines long-term business continuity and discourages new ventures. “No business can survive Reeves’s 20 per cent tax grab,” he argued, highlighting the risk of job losses in a sector that, he says, traditionally values stability and generational commitment.

In defence of the Budget, Home Secretary Yvette Cooper rejected Dyson’s remarks, asserting that the measures were necessary to address “the shocking state of public finances.” Cooper stated that the tax changes were part of a strategy to “fix the foundations” of the economy and fund critical public services, including the NHS. She emphasised that, while the policy involved difficult decisions, it was essential for building a stronger financial foundation.

The inheritance tax changes come amid a broader £40 billion tax increase aimed at supporting the NHS and other public services. However, critics argue that the tax on family farms, expected to raise £520 million annually, would cover less than a day’s NHS spending. National Farmers Union president Tom Bradshaw warned of a mental health crisis among farmers, with many expressing concern that the tax could force them to sell or significantly alter their businesses.

Rachel Reeves defended the inheritance tax changes on Sunday with Laura Kuenssberg, stating that agricultural property relief primarily benefited “the wealthiest landowners” and was no longer sustainable given current fiscal pressures. She argued that redirecting funds from these reliefs into public services would ultimately benefit all, including rural communities.

As rural voters and family businesses react to the policy, Labour faces pressure to balance tax reform with the unique needs of these sectors, particularly ahead of local elections in May.

Read more:
James Dyson condemns ‘spiteful’ inheritance tax in budget, warns of impact on family businesses