Top 10 facts you didn’t know about Income Tax

1 min Read Published: 25 Mar 2011

1. Income tax was first implemented by William Pitt the Younger in 1798 to pay for weapons and equipment for the Napoleonic Wars.

2. The initial base rate was less than 1p in the £.

3. It was abolished in 1802 by the then prime minister Henry Addington but was reintroduced in 1803 and abolished again in 1816. It was finally reintroduced by Sir Robert Peel in 1842 due to a growing budget deficit.

4. The highest income tax rate was during the Second World War when it peaked at 99.25% and remained at around 95% till the late 1970s.

5. The actor Wesley Snipes, the jockey Lester Piggott and Chicago gangster Al Capone have all been jailed for tax fraud.

6. Due to the growing number of tax payers there was a need for a more efficient collection scheme and PAYE was introduced in 1944.

7. The Beatles song "Taxman" refers to the high rate of income tax at the time, with the lyrics - "Let me tell you how it will be, there's one for you nineteen for me".

8. In 1974 the top-rate increased to it's highest rate since the war at 83%. This combined with a 15% surcharge on unearned income could add up to a combined marginal rate of 98%.

9. In Margaret Thatcher's first budget after her 1979 election victory she reduced the top rate from 83% to 60%.

10. The American statesman Benjamin Franklin (1706-1790) once famously said -  " In this world nothing can be said to be certain, except death and taxes".

image by Cappellmeister - flickr

Looking for a financial adviser near you?

Do you need financial advice? An independent financial adviser can show you how to make the most
of your money. Find your nearest qualified and regulated adviser using this VouchedFor search tool.

Alternatively, Hargreaves Lansdown, one of the UK’s largest firms providing restricted financial advice, is offering a £200 John Lewis voucher* to new clients.

  1. very interesting page I am going to tell my friends about this
    One of my questions in does income tax have to stopped on an army pension

    1. Eileen,

      Can you elaborate a bit more as I’m not clear on your question.

      Post a longer question in the ‘question box’ and I’ll answer it in detail.

      Damo

Comments are closed.