The billionaire entrepreneur says the Chancellor’s stance is damaging despite the watering down of a crucial policy.

Dyson founded a huge global company that he says may not be able to be handed down to his children (Image: Getty)

Billionaire businessman Sir James Dyson has slammed Rachel Reeves, suggesting that his business is at risk. The tycoon says he may not be able to pass his company down to his children because of the Chancellor’s tax raid on family firms. On Tuesday, the Government said it would water down its policy, raising the inheritance tax relief threshold from £1million to £2.5million after months of protest.

But business assets above that new threshold will still be subject to a 20% levy when a business owner dies. Ms Reeves’s changes to Business Property Relief (BPR) are “really, really damaging” to private family-owned operations, Mr Dyson said.

The entrepreneur added that his company would have to find “billions”, which he says would be impossible.

Sir James told BBC Radio 4’s Today programme this morning: “You have to pay a 20% inheritance tax. Actually it’s 40% because you have to take a dividend, if you could, to pay the 20%.

Sir James Dyson says his firm would have to fork out billions in death duties (Image: Getty)

He added: “What it means is you’d have to sell the business.

“And 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.”

The Dyson founder also said: “Companies are valued on a multiple of their earnings. So if you’re paying 40% of a multiple of your earnings, that’s billions in my case.

“We haven’t got billions of cash. You know, we don’t have it – so you have to sell the business to pay it.

“But a company has no value. There’s no assets that you can sell. Its value is a multiple of its profits, so it’s paper money. You simply don’t have that money.”

The Government focused the announcement of its change in tack on farmers.

Environment Secretary Emma Reynolds said: ”Farmers are at the heart of our food security and environmental stewardship, and I am determined to work with them to secure a profitable future for British farming.

“We have listened closely to farmers across the country and we are making changes today to protect more ordinary family farms.

“We are increasing the individual threshold from £1million to £2.5million which means couples with estates of up to £5million will now pay no inheritance tax on their estates.

“It’s only right that larger estates contribute more, while we back the farms and trading businesses that are the backbone of Britain’s rural communities.”