UK (Parliament Politics Magazine) – Kemi Badenoch’s department wrote a letter to the Treasury following Dyson’s concerns about rising corporation tax.
According to the documents, Ms Kemi ordered her department to contact the Treasury about a potential tax break.
As reported by The Guardian, meeting minutes from last June reveal that Dyson board member Ian Robertson urged Kemi Badenoch to address the patent box tax benefit. He argued that, due to the increase in corporation tax, the benefit was no longer as useful.
During the meeting, James Dyson directly requested Kemi Badenoch to take action on the rise in corporation tax. The notes from the meeting, published under the Freedom of Information Act (FIA), indicate that she pledged to consider the issue, and later her department contacted the Treasury.
The meeting notes show Roberston stated “the percentage allowance [of the patent box tax] should be increased. SoS noted she would look into this matter.”
The documents state the meeting ended with a decision to follow up, with the secretary of state’s team given the task of preparing a memo regarding the patent box tax.
The paper published under a freedom of information request suggests that the Department for Business and Trade reached out to the Treasury about the particular issue.
As per the document, when Mr Dyson discussed the issue of rising corporation tax with Badenoch, he stated, “that the rises lead to a reduced ability for Dyson to invest further. JD [James Dyson] outlined the reporting requirements on Dyson are also almost the same as with a listed company and this should not be the case.”
In response, Ms Kemi replied that corporation tax was the Treasure’s responsibility.
Following the meeting, Ms Badenoch’s office contacted the Treasury with a letter on Dyson’s behalf, which was later made public under a freedom of information request. The letter argued that the current tax system was limiting investment opportunities for growing firms.
Mr Dyson described the patent box scheme as an effective policy that helps high-tech, R&D firms to turn intellectual property into commercial in Britain. He expressed concern that the March budget’s hike in corporation tax was not balanced by enhancements to the patent box benefit.
The letter stated “If the patent box allowance were to be increased in line with the corporation tax increase, that would go some way to encourage technology companies like Dyson not to move their R&D operations away from the UK,” the letter said.”
An internal email from a Treasury official to Ms Kemi’s department confirmed that there were no proposed modifications to the tax system, stating that there were no further details to discuss.
A spokesperson from Dyson said that, like many other major UK companies, the firm meets with ministers and plays a significant role in the country’s patent filings, investment, and providing jobs.
A representative of Ms Kemi stated that she supported Dyson’s arguments on tax relief and also highlighted her willingness to listen to business concerns, not like the Labour government’s treatment of businesses.
The patent box, launched in 2013 by George Osborne, was designed to help UK tech firms pay just a 10% tax on the profits they make from new ideas.
The latest figures from the government reveal that between 2022 to 2023, around 1,600 companies used the patent box, receiving £1.5bn in tax relief, with 94% going to major firms.
In a letter to the Times published in May 2023, James Dyson condemns the increasing tax pressures on R&D investments.