Tax returns - if you are business owner or self-employed worker in Wakefield, you may see tax returns as an intimidating and complex process and for this reason turn to Wakefield based David Adamson to handle your tax returns. But did you know how income tax started in Britain?
The year was 1799, and Britain had been at war with France for six years. William Pitt the Younger was Prime Minister of Britain, and George III was King of England. Up until this point, income tax had not existed. Tax returns were not something that anyone had thought about.
In 1799 this changed. The British economy was struggling. The returns from foreign trade were dwindling as Britain struggled to keep foreign markets open, and the tax income was not covering the growing national debt. By 1799, the national debt had reached over £350 million, and tax returns from other forms of tax were insufficient. In Wakefield, as in many other areas, resentment was growing, and working-class protest movements were on the increase. In order to raise tax and overcome falling financial returns, as well as deal with the protests in places like Wakefield, Pitt introduced income tax. This meant that anyone with an annual income of over £60 was required to pay tax at a rate of 10%. This new form of tax drastically increased the tax returns that the government received.
The intention was that income tax would be a temporary way of raising tax returns, especially in light of radicalism in places like Wakefield as well as the cost of war. Therefore, it was abolished in 1816, and in its place taxes on goods, like grain, were raised. However, the precedent for income tax had been set and in 1842, Prime Minister Robert Peel reintroduced income tax for the wealthy. Once again, this was a way of raising tax returns, and was motivated by financial need as well as political protest – the Chartists, a political protest group, had been active in Wakefield and other northern towns. Because the tax remained small and only affected a wealthy minority, it was not challenged and remained in place.
In the twentieth century, income tax once again became a crucial government source of increased tax returns. From 1909, there were two forms of income tax, income tax for the majority of the population but also supertax for the wealthiest in society. In 1919, as a result of the damage the war had done to the economy, income tax was increased to 30%. Government income from tax returns rose dramatically. Many workers in Wakefield would have felt the pinch from this tax.
By 1973, income tax had been simplified to a single system with different bands for higher and lower earners. It is a form of tax that affects all earners, with a long history. But if you are self-employed, doing your tax returns can be a challenge. If you are in the Wakefield area, why not contact David Adamson to see how he can make this tax simple and less costly for your business?