A Brief History Of Income Tax

Chancellor of the Exchequer, Kingsley Wood, presented four budgets to Parliament during the forty wartime months he was Chancellor of the Exchequer.

In July 1940, he created a council of economic advisors. One of these was John Maynard Keynes, who was quickly recruited as a full-time adviser at the Treasury.

In his second budget in April 1941, Keynes' conception of using national income accounting to control the economy was adopted.

Gone was the orthodox Treasury doctrine that Chancellors' budgets were purely to regulate governmental revenue and expenditure.

Instead he brought in a top rate of income tax and added two million to the number of income tax payers.

For the first time in Britain's history, the majority of the population was liable to income tax.

Between 1938 and 1943, inflation increased sixfold thanks to the public expenditure incurred fighting a world war. Kingsley Wood therefore subsidised essential rationed goods, while imposing heavy taxes on goods classed as non-essential.

The PAYE System

Howard Kingsley Wood, as Chancellor of the Exchequer during World War II, championed introduction of the system called Pay As You Earn (PAYE).

Because this system was introduced and remains in place today, most employees in Britain don't ever have to complete a tax return.

Instead, their employer calculates and pays income tax and national insurance from the worker's salary. Then those taxes are paid directly across to HMRC (Her Majesty's Revenue and Customs) without the employee taking any action.

Death Of Sir Kingsley Wood

Sir Kingsley Wood died suddenly at his London home (apparently the addreas was Buckingham Palace Mansions) on the morning of 21 September 1943, at the age of 62.

Later that day, he was to have announced the PAYE system to the House of Commons.

Agnes, the widow of Sir Kingsley Wood, died in 1955.

The Prime Minister, Winston Churchill's tribute, to Sir Kingsley Wood, (to the House of Commons), 22 September 1943:

"The extension of the Income Tax to the wage-earners was a very remarkable step. That it should have gained the assent of this House, elected on universal suffrage, is also a remarkable fact, showing how extremely closely the wage-earning masses of the country and those who represent them feel associated with the vital issues now being fought out in the field.

Undoubtedly, payment in arrears, when the Treasury accounts are made up, being demanded from the wage-earners, produced many cases of very great hardship and tended to cause dissatisfaction with a great principle of taxation which was being so very willingly accepted. The Chancellor had given the closing weeks of his life to a most careful study of the 'pay-as-you-go' principle, and he was looking forward, on the very day that he died, to making a statement to the House on the subject. "

https://www.expatica.com/uk/finance/taxes/a-complete-guide-to-the-uk-tax-system-758254/

HM Revenue and Customs
(HMRC) is responsible for administering and collecting taxes in the UK. Tax receipts for the UK totaled approximately £584.5 billion in 2020/21, a decrease of 7.7% from the previous tax year.

Basic UK taxes include income taxes, property taxes, capital gains, UK inheritance taxes, and Value Added Tax (VAT). Many of these are progressive taxes, meaning that those with higher incomes pay a higher rate.

The British fiscal system applies throughout the United Kingdom: England, Scotland (though there are some specific differences owing to Scotland's unique legal system), Wales, Northern Ireland, and many of the smaller islands around the British coast. Furthermore, it includes oil drilling platforms in British territorial waters, though, notably, it excludes the Channel Islands and the Isle of Man.

One interesting aspect of UK tax is that it treats spouses as separate entities and taxes them as individuals, with the exception of a small allowance for the purpose of income taxes.

Most individuals are entitled to a personal allowance that they do not need to pay tax on. This is £12,570 in 2022/23

Tax-exempt income

There are a number of areas of income that are exempt from taxation in the UK. The following are exempt from UK income tax:

Transport costs associated with relocating an employee and close family to the UK at the beginning and end of UK assignments

Gaming winnings from pool betting, lotteries, or games with prizes

Long service awards (within certain limitations)

Individual savings accounts for UK residents up to £20,000, andt income arising from funds invested in such accounts, such as interest or dividends

Certain pensions, such as those paid to war widows and dependents, as well as similar pension payable under the laws of a foreign country

Certain social security and state benefits, including child tax credit, housing benefit, maternity allowance, employment and support allowance, and attendance allowance

My Story With HMRC

During the time that I have been self employed, I got my first tax bill around 10 years ago, it was only for about £100, because I only earnt just over the personal allowance for that year, so my tax bill was small. I A4V'd the debt but the tax office ignored it and so I asked for evidence it wasn't already paid amongst other things, which HMRC also ignored and added fines to the alleged debt they said i still owe. In fact they said that I now have to pay £100 a day, well I wrote back to them telling them I'll be happy to pay all of the alleged debt once they provide the evidence I asked for, which they ignored again, they even added a very strange sentence to some of their correspondance about being aware of certain websites, and when I say certain websites, I mean they didn't name any websites or what it has to do with what either of us was writing about, they just literally used the phrase "certain websites", I was going to reply, "that's interesting, because I'm aware of certain newspapers and TV stations, but I'm not interested in having a penpal in HMRC so can you keep your hobbies to yourself please", but I ignored that comment instead. Anyway, I also put that they pay me 3x the amount of any unverified debts they claim I owe and that they agree to pay me £5000 for using MR in front of my name. Their response was pretty funny because instead of MR they put NOT KNOWN in front of my name, I was so tempted to write on the envelope "NOT KNOWN is not known at this address - return to sender", maybe I will now that I've got a pile of 10 years worth, as they never stopped writing to me and sending me bills, I just don't open their letters anymore. Another thing they didn't do is follow the law of this country, in fact I was waiting for them to take me to court so that I could present my evidence, but all they did, just like any other company that has no standing, is sold the debt on to debt collectors! Anyway, as we all hopefully know by now, once they do that, that means our debt is paid anyway. (See my 'Dealing with bailiffs' page, where you'll also find the notice I have on my door used to get rid of debt collectors).

And all I usually do if if I get a debt  from a debt collector rather than from a County Sheriff aka Court Bailiff from one of the higher courts of England, is write on the envelope 'no contract - return to sender' and post it back. There was nothing on my credit report either after all, how can there be if it never went to court anyway? The only thing is, if I get an employed job, rather than self employed, maybe it was just my imagination, but the tax deductions did seem high, but if you have an employer that you are able to talk to directly, as this doesn't seem to work with big corporarions who would rather fob you off, but you can ask them to pay your tax by donations which reduces the amount of tax paid by both of you.

Another important point to note is that if you are self employed and pay income tax, or even if you haven't paid any yet because your wages aren't or haven't been high enough, if you registered with HMRC, you would have filled out an SA100 Self Assessment (self employed tax return) which i did, as it was many years before i started learning about the law that i became self-employed, so i also had to deal with that in my process of dealing with HMRC.

If we go to the HMRC website and look at that form, (I could only find the PDF version):

https://www.gov.uk/government/publications/self-assessment-tax-return-sa100

It says the following at the end of that form, in the part where we are supposed to sign it:

"I declare that the information I have given on this tax return and any supplementary pages is true and complete to the best of my knowledge and belief." Which is fine of course, but then it continues:

"I understand that I may have to pay financial penalties and face prosecution if I give false information." This part is important for hopefully obvious reasons, if we sign this, we're giving consent to prosecution later down the line if we for instance decide that we no longer wish to pay income tax or not to pay it at all if we haven't yet. So you'd also have to deal with removing that agreement that you signed in any process you do.

My Complete Process

If you'd like to learn the complete process i uses for dealing with HMRC and their income tax bill, which can be adapted for their fines, bearing in mind that nothing i share is legal/tax advice, then you can make a donation for £220, at the following PayPal link:

https://www.paypal.com/donate/?hosted_button_id=U5DQQZ86TXXE6

or the QR code below:

Also take a look at my 'Creating Trusts' page, below for some very important info on HMRC powers regarding your bank account etc:
https://law-5.webnode.com/creating-trusts-restricted

Otherwise, let's continue this journey by heading over to page 16: 

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