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

Sir James Dyson has strongly criticized 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 more than £1m will face a 20 per cent inheritance tax from April 2026, a measure Dyson says could lead to the “death of entrepreneurship” and dismantle the foundation of the British economy.

Writing for The Times, Dyson accused Reeves of “killing existing family businesses” through the so-called “family death tax”, warning that the policy undermines long-term business continuity and discourages new ventures. “No company can survive a 20 percent Reeves tax take,” he said, highlighting the risk of job losses in a sector that, he says, traditionally values ​​stability and intergenerational commitment.

Defending the budget, Home Secretary Yvette Cooper rejected Dyson’s comments, stressing that the measures were necessary to address the “appalling state of the public finances”. Cooper said the tax changes were part of a strategy to “fix the foundations” of the economy and fund vital public services, including the NHS. She stressed that although politics involves difficult decisions, they are necessary to build a stronger financial foundation.

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

Rachel Reeves defended the inheritance tax changes on Sunday with Laura Kuenssberg, saying the agricultural property exemption primarily benefited the “wealthiest landowners” and was no longer sustainable given current financial pressures. She said redirecting money from these subsidies to public services would ultimately benefit everyone, including rural communities.

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