Taxes the 18th century way

Today income tax is a 'direct' tax paid by almost every working adult in the UK. There are also 'indirect' taxes on a wide range of commodities and consumables.

The Land Tax

In the 18th century, however, the structure of taxation was quite different. Direct tax was only paid by the owners of land or property according to the size of their landholdings.

This tax - the 'Land Tax' - was paid by the more prosperous sections of society, from the wealthiest duke to the owners of business premises such as tradesmen, shopkeepers and innkeepers. The rate of tax was set by Parliament each year in a 'Land Tax Act' and was usually between two and four shillings in the pound, based on the value of each individual's land or property.

An unusual feature of the tax was that it was administered not by government officials, but by unpaid local 'commissioners', gentry who were nominated by Parliament and whose names were included in the annual Land Tax Acts. Those who collected the tax were usually local men of modest means, such as farmers or tradesmen.

Indirect tax

The commonest indirect taxes paid by most people in the 18th century were excise duties. These were levied by Parliament on basic commodities - household essentials such as salt, candles, leather, beer, soap, and starch.

Duties on 'luxury' items, such as wine, silks, gold and silver thread, silver plate, horses, coaches and hats were aimed at wealthier consumers. Parliament raised or lowered duties, as well as adding new items or dropping others, depending on the needs of the time. In practice, however, consumers were largely unaware of these impositions as it was the traders who actually paid.

There were also 'Assessed Taxes', of which the best known is the Window Duty. This was first levied by Parliament in 1696 in support of William III's war with France. House owners paid two shillings on properties with up to ten windows, and four shillings for between 10 and 20 windows. From 1778 the rate was made a variable one depending on the value of the property.

Also within Living Heritage

Learn more about William III's war with France and how the need to raise taxes affected the evolution of Parliament

Did you know?

In order to avoid paying the Window Duty, householders sometimes bricked up their windows in order to minimise the amount of tax they had to pay. The tax was eventually repealed in 1851.