Business Secretary’s Office Raised Issue of Patent Box Benefit Following Dyson’s Concerns Over Tax Increases

Kemi Badenoch’s department intervened with the Treasury after Dyson raised concerns about the patent box tax benefit, newly released documents show. During a meeting in June 2023, Dyson representatives, including board member Ian Robertson and founder James Dyson, discussed the impact of rising corporation tax on the effectiveness of the patent box tax relief.

Robertson explained that the patent box, a tax relief benefiting companies that commercialise intellectual property, had become less effective due to the increase in corporation tax. He suggested raising the percentage allowance of the patent box to mitigate this issue. James Dyson personally addressed the issue with Badenoch, arguing that the increased tax burden was limiting Dyson’s ability to invest in research and development (R&D) within the UK. Dyson also highlighted that the company’s reporting requirements were almost identical to those of listed companies, which he felt was unfair.

In response, Badenoch promised to examine the matter, and her department followed up with the Treasury. This led to an official letter from the Department for Business and Trade to the Treasury, which relayed Dyson’s concerns and the company’s request for an adjustment to the patent box benefit. Dyson’s letter argued that the current tax regime was stifling innovation and investment in the UK. Dyson further warned that if the patent box allowance wasn’t adjusted to account for the rise in corporation tax, the company might consider relocating its R&D operations abroad.

The patent box, introduced in 2013 under then Chancellor George Osborne, aimed to attract high-tech companies to the UK by offering a reduced tax rate of 10% on profits from patents. However, the benefit has become less impactful due to successive cuts in corporation tax. Recent increases under Rishi Sunak’s government have prompted concerns from companies like Dyson, who argue that without changes to the patent box, the UK’s tax system could harm its status as a leader in technological innovation.

The Treasury responded that there were no planned changes to the patent box regime, dismissing Dyson’s request. Dyson’s spokesperson explained that the company regularly engages with ministers and that the meeting with Badenoch reflected Dyson’s substantial contribution to the UK economy and its role as a leading innovator.

Badenoch’s spokesperson defended her actions, stating that as Business Secretary, she was always willing to listen to the business community and highlighted the importance of Dyson’s contributions to UK innovation. However, critics from the Labour party have accused the government of prioritising the interests of wealthy corporations while disregarding the needs of ordinary workers.

Recent government figures indicate that in 2022-23, 1,600 companies claimed £1.5bn in tax relief through the patent box, with the majority of this relief benefiting large firms like Dyson.

Company Faces Ongoing Struggles as Rival Discounting and Overproduction Weigh on Market

Brompton Bicycle, the renowned British manufacturer of folding bikes, has seen its profits plummet by over 99%, with the company predicting further difficulties in 2025 for the bike industry. The significant drop in earnings follows a period of intense price-cutting by competitors, leading to widespread discounting and excess stock.

For the financial year ending in March 2024, Brompton’s profits fell from £10.7 million to just £4,602, a figure lower than the cost of its premium T Line Explore model. The company experienced a 5.3% drop in sales, amounting to £122.6 million, as demand for its high-end bikes decreased during the ongoing cost-of-living crisis. The number of bikes sold also fell by 8.2%.

Will Butler-Adams, Brompton’s managing director, attributed the profit decline to a struggling global bicycle market, highlighting the oversupply of bikes following inflated demand during the Covid-19 lockdowns. “The industry remains in turmoil and won’t recover this year. Although it may not be as severe as 2024, there is still too much stock,” said Butler-Adams.

The global bicycle market, particularly in Europe and the US, has been impacted by poor sales and the need for significant discounts as manufacturers and retailers attempt to reduce surplus inventory. Several bike brands and retailers, including UK-based companies such as Mercian and Orange Mountain Bikes, have gone out of business in the last two years.

Brompton, in particular, has been affected by aggressive price cuts from struggling competitors, along with increased competition from electric bike rental schemes like Lime and more affordable Chinese alternatives. In the UK, the bike retail sector has been further squeezed by the closure of independent chains such as Cycle Republic and Cycle Surgery, with larger retailers like Evans also scaling back.

In response to these challenges, Brompton has paused its plans to relocate to a new headquarters in Ashford, Kent, and cancelled its annual dividend after a £1.2 million payout the previous year. In early 2024, the company secured £16 million in funding from BGF, a bank-backed investment firm, which now holds an 8.5% stake in Brompton.

Despite these hurdles, Butler-Adams remains confident in Brompton’s future, citing its focus on practical, commuter-friendly bicycles as a key advantage. He is optimistic about the long-term outlook for the bike industry, as cities worldwide, including London, New York, and Paris, invest in cycling infrastructure to promote public health and environmental sustainability.

“The momentum for cycling is growing globally,” he explained. “Though the industry has faced setbacks, governments are pushing for more active transport, which will eventually benefit the sector.” Looking ahead, Brompton is excited about its new G Line model, particularly the electric version, seeing it as an opportunity to invest and innovate during a challenging period.

Debbie Crosbie highlights the potential downside of remote work for women’s promotion prospects in senior roles.

The chief executive of Nationwide, Debbie Crosbie, has raised concerns that working from home could negatively impact women’s career advancement, as they are less likely to attend the office compared to their male counterparts. Crosbie, speaking to BBC Radio 4’s Today programme, warned that while flexible working has benefited many women, particularly those balancing work and childcare, it could ultimately hinder their chances of securing senior positions.

Nationwide, the UK’s largest building society, which serves over 17 million customers and employs around 18,000 people—60% of whom are women—introduced a “work anywhere” policy during the pandemic for non-branch staff. However, this policy was revised a year ago, with staff now required to work in the office at least two days per week.

Crosbie explained that the flexibility brought about by the pandemic had been a positive development, particularly in allowing employees to work from home more easily. However, she cautioned that women might face career disadvantages as a result of the trend. “The challenge we face at Nationwide is that men are more likely to come into the office than women,” she said. “We need to ensure that women don’t miss out on vital opportunities for professional development by being less visible in the workplace.”

Reflecting on her own career, Crosbie shared how her early experiences shaped her approach to leadership. She recalled working under Lynne Peacock, the former CEO of Clydesdale Bank, who she described as a “very inspiring female CEO”. Crosbie said she felt fortunate to be in an executive role when she had her daughter at the age of 32, as it allowed her the flexibility to balance work and family life, benefiting from the support of leaders who permitted her to work part-time for a few years.

Crosbie also pointed out a trend among women today: they are increasingly having children later in life, often in their late 30s, which coincides with the period when many people are expected to move into more senior executive roles. This delay, she suggested, could present challenges for women aspiring to top leadership positions.

Despite the progress made in gender equality within business leadership, as evidenced by the latest FTSE Women Leaders Review, which found that 42% of directors at FTSE 350 companies are women—up from under 10% before 2011—Crosbie emphasised that much work remains. The review also revealed that only 21 women currently serve as CEOs of FTSE 350 companies, with just 10 leading FTSE 100 firms.

While acknowledging the progress made, Crosbie stressed the importance of continuing to push for greater representation of women in executive roles. “We’ve made enormous strides, but there’s still a long way to go,” she said, underscoring the need to build a stronger pipeline of senior women to ultimately increase the number of female CEOs in the UK.