The Prime Minister, and the Chancellor of Exchequer William Pitt the Younger introduced income tax in 1799. The sole reason the tax was introduced was to beat the French army under Napoleon. Napoleon’s army was better prepared and Britain was in danger. The cost of war was high which led to Britain under national debt. This led to the army being provided with less food and treated poorly, which resulted in the soldiers to go on an open rebellion against the government. Direct tax upon income was intended to be a temporary solution and it was referred to as a tax to beat Napoleon. The tax was to be paid in six equal installments at a rate of 10%, people earning above £60 had to pay the tax. Only about one-sixth of the money was raised from the income tax, but it had proven itself a most valuable addition to the government revenue. Pitt’s income tax was not very successful as he estimated an unrealistic figure of £10 million in 1799, but the actual amount received was less than £6 million. In 1800 he estimated £7 million yet it was below £6 million. In the following year in 1801 he budgeted a realistic value of £6 million but it dropped to £5,300,000.
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