How did Income Tax Start?

How did Income Tax Start? - Income includes just about everything a person earns: wages and salaries, interest on bonds and savings bank accounts, dividends on stock, and rents. It also includes the payments that are received by doctors, lawyers, authors, inventors, and other professional person.

Income tax in this country was first levied by William Pitt the Younger, in 1799, to pay for the French Wars. Today, income tax is a personal tax on all annual income from investments or employment.

The amount due is assessed on an annual return of income, with the rate of tax graded in accordance with the size of income and with a differential between earned and unearned income. A proportion of income is left free of tax, according to a scale of allowances for personal or family expenses.


In Britain, rates of tax are fixed by an Annual Finance Act and the people who manage the income-tax system are called Commissioners of Inland Revenue. Inspectors of Taxes control local tax districts. General or Special Commissioners hear appeals against tax assessments or refusals of allowances. Income tax, when first introduced, was intended to be only a temporary measure! 

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