What’s Napoleon got to do with today’s UK budget?

Most people don’t enjoy paying tax. It’s a difficult balancing act for any government as they need tax revenue to fund certain public services but at the same time they can become unpopular (and hence out of a job!) as a result of excessive personal tax burdens.

Income tax in the UK has been around a long time and its introduction involves their close neighbour, France.

Whilst relationships between the UK and France are very cordial at the moment, this hasn’t always been the case.

Way back in 1798, British forces under the leadership of the Duke of Wellington were at war with Napoleon’s French forces. The cost of the war was weighing heavily on British resources and the national debt was mounting up.

As a result, in 1799 “certain duties upon income” were imposed on a temporary basis with the aim of providing greater “aid and contribution for the prosecution of the war” against Napoleon.

The first rate of UK income tax was 10% and this was applied to the total income of the taxpayer from all sources in excess of £60. Given that the top rate of income tax in the UK is currently 50% I’m sure that some taxpayers would more than welcome the reinstatement of the original rate of 10%!

Interestingly enough though, income tax is still technically a ‘temporary’ tax. It expires each year on 5 April and Parliament has to reapply it by an annual Finance Act.

The ExP Group