Income Tax introduced in UK

It was a dire time in Britain – Napoleon was in firm control over a good portion of Europe and threatening to invade, but due to a decline in trade with Napoleon-controlled territories, the government could not raise enough funds through taxation to pay for an army to withstand him. The solution, announced by Prime Minister of the Exchequer, was to be temporary but “certain duties upon income.”

On this day, January 9th, in 1799, the first income tax in Britain was introduced. The rate was 10% for all income above £60, up to a maximum of 2 schillings for incomes above £200. The tax raised considerably less revenue than expected, but was nevertheless repealed following a peace treaty with Napoleon.

It did not take long, however, for war to break out again, and the temporary income tax went back into effect, first at 5% and eventually at the previous 10%. A few decades later, the tax was again temporarily extended in a non-wartime economy. It has technically been temporary even since, requiring renewal by an act of parliament every April 5th.