mm1 820x410 - A look at Surrey’s history and today’s tax climate

A look at Surrey’s history and today’s tax climate

Surrey is one of the historic counties of Britain. The most striking thing about Surrey is perhaps the Surrey county cricket club, one of the first cricket clubs in existence. Surrey began as a fishing hub during the time of the Semiahmoo, Katzie and Kwantlen people, and the agricultural landscape is ever so prominent today.

We start from the early modern age when the Tudors occupied Surrey. It was an age of prosperity for the county, with great castles built in those parts. It was an important industrial hub, previous known for its blooming cloth and textile industry. Later, the iron industry took over and contributed majorly to the local economy.

Surrey was governed by a county council in the 1800s under Newington area. It’s 11 districts were spread and scattered across. However it was not officially a city until the early 1990s, when parts of the county were recognized under the Greater London area.

Properties here are governed by council taxes, as is the case with the rest of Britain. In the 1800s, the land taxes were administered strictly in the county, with people ineligible to vote unless they had paid their due land taxes. Later on, the need for land tax assessments were removed with electoral registers coming in.

mm2 - A look at Surrey’s history and today’s tax climate

We turn our attention here to a recent announcement on council taxes in Surrey. In February 2018, the local council voted to increase council taxes by an astonishing 6% on average, meaning that each individual should pay up an additional GBP 1.53 a week. The announcement came after a legislation from the central government in the end of 2017 that allowed local councils to hike the council tax independently.

The key reason for the increase in Surrey council taxes was as a result of widening definite and a lack of funding from the central government. As a result, alternative means of increasing revenues had to be identified. Government funding to Surrey had reduced by a net total of GBP 200 million in a period of 7 years.

The local government however aims to lead infrastructure and development projects that are both sustainable and can increase future revenue streams. This should enable a situation where the council taxes can be gradually reduced to perhaps less atrocious levels. We believe this is economically feasible.

img2 820x410 - A look at the history of Income tax in Britain

A look at the history of Income tax in Britain

Income tax is the most common means of tax that we are used to. As the name suggests, it is a tax on the income earned. It is the greatest example of socialism in today’s world and is based on the principle that everyone who receives income has an obligation to provide part of it for the cause of the greater good.

In this post, we look at the historic context of income tax in Britain. It was first introduced in 1798 by William Pitt the Younger. The intention of this tax structure at the time was to raise revenue to buy military equipment for the war with Napoleonic France. In a sense, people contributed part of their income to the crown to ensure the safety of themselves and their fellow citizens.

When it was introduced, it was quite nascent and its objective was to raise an annual revenue of GBP 10 million. It resulted only in 6 million in reality. One of the reasons was that at the time of introduction, the tax only applied to wealthy people above a certain threshold. Later, however, the threshold was widened to increase the collectible revenues.

img - A look at the history of Income tax in Britain

With time, its structure was solidified by adding many of the concepts we can see today in modern Britain. For example, the concept of debiting the tax directly from source was introduced in 1803 by Henry Addington. There, however, remained a controversial aspect of implementing a tax during times of war. This became especially significant after the historic battle of Waterloo, when people were poorer and the tax came as a heavy burden on them.

As a result, the tax was repealed in 1816. But as is always the case if you recall basic macroeconomics, tax appears in significance when there is a widening deficit. This was exactly the case in 1842, when the tax was reintroduced. To avoid earlier controversies, it applied again only to the rich, and remained so for many, many years.

The colonial era began and the sources of tax began to shift increasingly towards the colonies, especially wealthier ones at the time such as Africa, United States and India. British citizens enjoyed a period of prosperity, unburned by the shackles of taxation. We can say with certainty that tax was not a public burden till the beginning of the 20th century.

The 20th century saw the rise of significance of taxation, especially due to the universal appeal of socialism as a way to reduce widening inequality. Of course, there was also the contentious issue of military spending during the two major world wars. The tax rate became 30% by the end of the 1st world war and covered an average on 10 million British citizens.

The tax rate has stayed at these levels and has increased further. IT shows no signs of slowing down. Across Europe, a range of 30%-50% is the new normal today. One can only wonder what the situation would have been had there been no wars.