UK income tax

Taxation in the United Kingdom may involve payments to a minimum of three different levels of government: the central government (Her Majesty's Revenue and Customs), devolved national governments and local government. Central government revenues come primarily from income tax, National Insurance contributions, value added tax, corporation tax and fuel duty. Local government revenues come primarily from grants from central government funds, business rates in England and Wales, Council Tax and increasingly from fees and charges such as those from on-street parking. In the fiscal year 2014–15, total government revenue was forecast to be £648 billion, or 37.7 per cent of GDP, with net taxes and National Insurance contributions standing at £606 billion.

A uniform Land tax, originally was introduced in England during the late 17th century, formed the main source of government revenue throughout the 18th century and the early 19th century.

Income tax was announced in Britain by William Pitt the Younger in his budget of December 1798 and introduced in 1799, to pay for weapons and equipment in preparation for the Napoleonic Wars. Pitt's new graduated (progressive) income tax began at a levy of 2 old pence in the pound (1/120) on incomes over £60 (equivalent to £5,696 as of 2015), and increased up to a maximum of 2 shillings (10 percent) on incomes of over £200. Pitt hoped that the new income tax would raise £10 million but receipts for 1799 totalled just over £6 million.

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