Monday, Jan. 9, 2012
THEN
Jan. 9, 1799, at the age of 24, William Pitt the Younger—the youngest British prime minister in history—introduces Britain’s first income tax. As a measure to increase revenue to fund a war against Napoleon’s forces, Prime Minister Pitt introduces the income tax as a “temporary measure.” The tax is applied at a rate of 1 percent on annual incomes over 60 pounds and 10 percent for an annual income over 200 pounds. It raises 6 million pounds. Pitt’s tax establishes an important precedent for the British tax system levying taxes according to five categories of income sources including: land, employment, trading, commercial use of land, public securities, and professional and overseas earnings.
NOW
Today, the U.K.’s HM Revenue & Customs (HMRC) manages the collection and administration of taxes in the United Kingdom. It overseas the collection of taxes on employment, capital gains, corporation, and inheritance, and others. Despite the large infrastructure, according to U.K.-based tax evasion watchdog the Tax Justice Network (TJN), the U.K. ranks as the No. 9 worst country for tax evasion. The TJN survey ranks the United States first. British Prime Minister David Cameron recently announced an intensified effort to clampdown on tax evasion, saying the authorities will take a tougher approach to deal with corporations that hire lawyers and accountants to decrease their tax responsibilities. In 1992, Queen Elizabeth II elected to pay taxes on her income in an effort to bring the monarchy closer to the people.
