by Elliot Keck, investigations campaigns manager
The UK’s tax code is notoriously long - 17,000 pages long. Within this there are countless examples of unnecessary, unnecessarily complex and downright harmful taxes and tax exemptions. Of course this isn’t a recent phenomenon. The history of taxation is littered with examples of the bad and the ugly. Here are five of the strangest…
1. Urine tax
This Roman-era tax really takes the, um, biscuit. It was first introduced by the Emperor Nero, who ruled from 54-68 AD and was described by a contemporary writer as an “enemy of mankind.” The tax appears ridiculous today, but likely appeared less so in Roman times, given the important role urine played in daily life. According to National Geographic, ancient Romans used it for “laundering clothes and even whitening teeth.” Briefly abolished following Nero, the tax was reintroduced by Emperor Vespasian, 69-79 AD and helped to finance the building of the Colosseum, a project which, incidentally, took eight years to complete. Crossrail, by way of comparison, will surpass 13 years since construction began when it finally opens on 24 May 2022.
2. Window tax
Surely one of the best-known taxes of history, at least in England, where its consequences are still visible to anyone walking past Georgian-era buildings. The window tax was a property tax based on how many windows a house had. It was introduced in England and Wales in 1696 and was at least intended to have the benefits of progressive taxation – with revenue-raising targeted at the wealthy – but without the controversies of an income tax, which was seen as an unacceptable intrusion by government into private affairs. At introduction it was made up of two-parts: a flat-rate house tax of two shillings per house and an additional and increasing levy on houses with more than ten windows. Unsurprisingly the consequence was simply that landlords boarded up windows and new buildings were constructed with insufficient windows. It serves as an excellent reminder of why taxes need to be broad and difficult to avoid. If you provide a window through which people can avoid taxation, don’t be surprised when they climb through it (or board it up).
3. Hat tax
Another example of a Georgian-era tax clearly designed with progressive intentions, this was a tax first introduced in 1784 under Pitt the Younger, during a period when the country was still recovering from the financial shock of the American War of Independence. The logic was simple: the wealthier you were, the more hats, and the more expensive the hats, you would own. For hats costing under four shillings, a duty of threepence was paid. For hats costing between four and seven shillings, sixpence was levied, and so on, up to hats costing over twelve shillings, for which a duty of two shillings was paid. The consequence? Hat-makers simply stopped calling their creations “hats”, leading to a tax on any headgear by 1804. This is reminiscent of the current battles of whether, for example, a Jaffa Cake is a biscuit or a cake, with VAT paid on the former but not the latter.
Scutage was a medieval tax paid by a knight to his lord in lieu of military service. Under feudalism, the nobility held lands from the Crown in exchange for military service. It was a means for the monarch to raise an army during a time of war without the need for a standing army. Scutage allowed for knights to avoid this military service, and was first mentioned in the 12th century. According to the Encyclopaedia Britannica, “it soon became a general tax on knights’ estates, and by the 13th century the rates were standardised.” It perhaps unfairly became known as the “cowardice tax.”
5. The Gin tax
An early example of a sin tax, the Gin tax was introduced in 1736 not as a revenue raising tool, but rather as a way to reduce gin consumption, which had exploded, particularly in London, during a period known as the “Gin craze”. By 1730, there were an estimated 7,000 gin shops in the capital, leading to one writer describing “a new kind of drunkenness, unknown to our ancestors” which “if not put a stop to, will infallibly destroy a great part of the inferior people.” The Gin Act of 1736 introduced a 20 shilling per gallon excise tax, as well as a £50 annual licence for all gin sellers. The result was enormous public anger and the growth of bootleggers producing increasingly dangerous alternatives. It was only the increase in the cost of grain that finally led to the end of the Gin craze, not repeated attempts at legislating and taxing it away.
Honorary mention: the TV tax
The TV tax, or BBC licence fee, was first introduced in June 1946 at a cost of £2 (if only!). In 1946, the BBC was the only broadcaster in the UK and so it was not unreasonable for a compulsory licence fee to exist in return to access BBC content. But the licence fee is not fit for the 21st century. With drastic technological change and the myriad ways in which people watch the media, the current model is now outdated. So in January 2020, we launched our Axe the Tax campaign to scrap the BBC licence fee. It’s time this tax was also consigned to the history books!