British heir to JCB threatens to leave UK in protest over tax raid

The heir to the JCB manufacturing fortune has threatened to leave the UK due to Rachel Reeves’ inheritance tax raid. 

Jo Bamford, son of JCB chairman Lord Bamford, said the Staffordshire-based company could relocate to the US to avoid paying a 20 per cent tax on assets worth more than £2.5m when his father dies. 

Ministers are ploughing ahead with plans to charge inheritance tax on family-owned firms – triggering warnings it could force centuries-old businesses to break up or dismiss staff to raise the necessary funds. 

Mr Bamford described the ‘family tax’ as a ‘real problem’ that threatened JCB’s future in Britain. 

‘It could quite easily become an American business,’ he told City AM. ‘I love being in Britain. I love being here. I love our factories here. 

‘But I would say to a political party of any stripe, look, there’s only so much you can ultimately do.’ 

Established in 1945 by Joseph Cyril Bamford – Lord Bamford’s father – JCB is one of Britain’s biggest family-owned manufacturing companies. 

The firm – which turns over more than £6billion a year – makes heavy machinery for construction, agriculture, waste handling and demolition, with 11 factories in the UK employing more than 8,000 workers.

Mr Bamford said he wanted to stay in Britain but believed Ms Reeves’ tax raid could force his hand.  

‘I’m here because I’m British, and I’m here and I employ people in Britain because I like British people and I like being in my part of the community,’ he said. 

From April 6, full inheritance tax relief will only apply on the first £2.5m of a firm’s assets, with anything above that facing a charge of 20 per cent. 

The threshold was previously set at £1m but it was raised after fears it could destroy Britain’s family farms. 

Mr Bamford is the latest business owner to criticise the tax after Sir James Dyson called it an example of ‘revenge economics’. 

Sir James Radio 4’s Today programme that his company would have to find ‘billions of cash’ when he dies, forcing it to ‘sell the business to pay it’.

‘You have to pay a 20 per cent inheritance tax,’ he said. ‘Actually it’s 40 per cent because you have to take a dividend, if you could, to pay the 20 per cent.

‘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 said he had already introduced his son Jake into the family business.

‘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 added.

It comes after a study has found that Labour’s chaotic tax policies are pushing Britain’s wealthy to consider moving abroad.

The survey of 200 tycoons worth at least £50million revealed that the Government’s U-turn tax policies were a bigger factor in deciding whether to leave the UK than the rate of the tax itself. 

Two-thirds of ultra-wealthy individuals were found to have considered leaving Britain in the last year for tax reasons, the poll by accountancy firm BDO showed, citing a ‘trust gap’ between the rich and the Labour Government.

While 42 per cent of respondents said tax policies were the main driver of their decision rather than high tax rates – which were given by just 18 per cent as a factor in leaving.

Analysis also showed that 55 per cent of ultra-wealthy and their inheritors felt people had a responsibility, not an obligation, to pay tax, while 82 per cent thought tax was a ‘social responsibility to be paid in full’. The problem, therefore, seems political.

Expert Elsa Littlewood said the ultra wealthy are suffering from ‘change fatigue’ within the tax system, and are ‘under constant pressure’.

Ms Littlewood said: ‘My sense is that they didn’t want to go. But year on year there’s been change after change, and living with that instability is wearing them down.

‘For many, the final straw came when the government started making big changes to inheritance tax and noises around big capital taxes. They feel that they are under constant pressure.’

A Treasury spokesman said: ‘We’ve listened and raised the relief threshold to £2.5m to protect more small family businesses, while ensuring the largest make a fair contribution so we can deliver support for families and businesses, including cutting the cost of living.’