Sir James Dyson has condemned Labour’s Budget as “spiteful”, warning the decision to raise inheritance tax on farms and family businesses will be the “death of entrepreneurship”.
The leading British businessman – who employs more than 2,000 people in the UK – claimed that the new government will “kill off home-grown family businesses”, dubbing the changes an “ignorant swipe at aspiration”.
The Budget – Labour’s first for nearly 15 years – saw the chancellor tighten inheritance tax relief on business property, meaning firms passing down assets worth more than £1m will be charged 20 per cent.
A 20 per cent levy on farms worth more than £1m has also been introduced, meaning inheritance tax will be applied to family farms for the first time in history.
Writing in The Times, Sir James said: “Rachel Reeves is killing off established family businesses, and any incentive to start new ones, with her 20 per cent Family Death Tax, levied each time a family business passes a generation.
“Every business expects to pay tax, but for Labour to kill off homegrown family businesses is a tragedy. In particular, I have huge empathy for the small businesses and start-ups that will suffer. Labour has shown its true colours with a spiteful Budget.”
Meanwhile Peter White, founder of pharmaceuticals manufacturer Nova Laboratories, said the change would make it harder for him to pass his business on to his children.
“My son will now need to personally generate approximately £26m of liquid cash on my death to continue to own and manage our pharmaceutical company. This is 40 times his personal wealth, including the value of his family’s home and all possessions,” he said.
Tom Bradshaw, head of the National Farmers’ Union, said that reversing the plans is the “only sensible course of action”. His comments come as he prepares for crunch talks with the environment secretary on Monday.
Tax experts have suggested the changes could affect fewer than 500 farms a year, once the tax thresholds and farmers giving their property to their children before they die are taken into account.
Over the weekend, Rachel Reeves said continuing with the tax relief is not affordable “when our public finances are under so much pressure”.
“Only a very small number of agricultural properties will be affected, but last year the benefits of agricultural property relief, 40 per cent of the benefit was felt by 7 per cent of the wealthiest land owners.
“I don’t think it is affordable to carry on with a relief like that when our public finances are under so much pressure,” the chancellor told the BBC’s Sunday with Laura Kuenssberg.
Ms Reeves has denied the Budget was about class, saying: “It wasn’t an ideological Budget, it was a Budget where we had to raise £40 billion to put our public finances on a firm footing and also to ensure our state schools, our NHS are properly funded and that we can build the homes and indeed invest in those long-term investment opportunities … to grow our economy and bring good jobs paying decent wages.”
