Sir James Dyson, the billionaire inventor and founder of the global technology company, has issued a stark warning that Chancellor Rachel Reeves' planned changes to inheritance tax are "really, really damaging" and put the future of his family-owned business at severe risk.
The Threat to Business Property Relief
Speaking on BBC Radio 4's Today programme, Sir James explained his profound concern over Labour's reforms to Business Property Relief (BPR). From April 2026, the relief that currently allows business assets to be passed down without incurring inheritance tax will be significantly curtailed. Under the new rules, full relief will apply only to the first £2.5 million of a business's assets upon the owner's death.
Any value above that threshold will be subject to a 20 per cent tax. Sir James argued the effective rate is far higher, stating: "You have to pay a 20 per cent inheritance tax. Actually it's 40 per cent because you have to take a dividend, if you could, to pay the 20 per cent."
'You Have to Sell the Business to Pay It'
The core of Dyson's argument is that the tax demand would be impossible for a privately-held company like his to meet without a devastating sale. "We haven't got billions of cash," he stated plainly. "You know, we don't have it, so you have to sell the business to pay it."
He emphasised that a company's value is often tied to its future profits, not liquid assets. "Its value is a multiple of its profits, so it's paper money. You simply don't have that money," Sir James said. This, he fears, spells the end for the continuity of family-owned enterprises. "Who wants to start a family business if you can't leave it to your children, if it can't carry on in the same ethos to which it started?"
Sir James revealed he has already introduced his son, Jake Dyson, into the business with the hope he will one day take over. "In my last gasp, I would like to see it going from strength to strength – for my son to take it over and for it to remain a family business," he told the BBC.
Broader Critiques of UK Manufacturing Policy
The interview also covered Sir James's long-standing criticisms of the UK's approach to industry. He defended his controversial 2002 decision to move Dyson's production to East Asia, insisting it was driven by proximity to suppliers, not lower labour costs. "When we moved our production to Asia, which I didn't want to but I was forced to, everyone else was moving their production to Asia," he explained.
He lamented a national loss of interest in making things. "We've lost our interest in engineering and lost our interest in manufacturing, and it's a great shame, because it is a wealth creator and it creates jobs." He dismissed the notion that manufacturing is for "developing countries," pointing to China's economic power.
While Dyson's headquarters are in Singapore and manufacturing is overseas, the firm maintains a major research and development operation in Britain, employing far more people in the UK than its old factories did.
The tax threshold for family businesses was initially set at £1.5 million before being raised to £2.5 million by the Prime Minister earlier this week, following a similar climbdown on Agricultural Property Relief after protests from farmers.
