James Dyson, one of the UK’s leading entrepreneurs, has strongly criticized the Labour government’s new tax policies, accusing them of harming family businesses and costing the nation billions in tax revenues. In a letter to The Times on Monday, Dyson claimed that Chancellor of the Exchequer Rachel Reeves’ recent changes to inheritance tax will destroy family businesses, calling it an attack on the very foundation of British enterprise.

Dyson’s objections are specifically directed at Reeves’ decision, announced in the Autumn budget, to end the exemption of family businesses from inheritance tax starting in April next year. The measure, aimed at generating £500 million ($624 million) for government funds, will require family businesses and farmers with assets worth over £1 million to pay a 20% inheritance tax, half the 40% rate imposed on other estates.

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However, Dyson argues that family businesses will effectively face the full 40% tax rate due to the mechanism used to fund the payment—dividends, which themselves are subject to additional taxation. He expressed frustration at the government’s apparent focus on British family businesses, claiming that private equity firms and publicly listed companies are not affected by these changes. Dyson posed a pointed question in his letter: “Why this vindictiveness only towards British families?”

As Reeves faces mounting challenges—including rising borrowing costs and sluggish economic growth—Dyson’s comments have added to the growing debate over Labour’s fiscal strategy. The party has justified the need for tax increases as a necessary step to stabilize public finances and support vital public services, but critics argue that these measures could have severe consequences for the backbone of the UK’s economy.