Historedia
EuropeEvent

Introduction of the British Income Tax

When
1798–1802
Where
Britain, where the budget announcement was made; Britain, where the tax applied; Britain, where the tax was collected; Britain, where the tax was abolished
Episodes
4

William Pitt the Younger announced a graduated income tax in his December 1798 budget and introduced it in 1799 to fund weapons and equipment for the Napoleonic Wars. The levy began at 2 old pence in the pound on incomes over £60 and rose to a maximum of 2 shillings (10 per cent) on incomes over £200, but raised only just over £6 million against a £10 million hope.

Episodes

  1. December 1798 · Britain, where the budget announcement was madeAnnouncement in the December 1798 budget

    Pitt announced income tax in his December 1798 budget as preparation for the Napoleonic Wars.

  2. 1799 · Britain, where the tax appliedGraduated rate structure of the 1799 tax

    The tax started at 2 old pence per pound over £60 and reached 2 shillings over £200.

  3. 1799 · Britain, where the tax was collected1799 receipts fall short of expectations

    Pitt hoped for £10 million, but 1799 receipts totalled just over £6 million.

  4. 1802 · Britain, where the tax was abolishedAbolition by Addington during the Peace of Amiens

    The tax was levied from 1799 to 1802, then abolished by Henry Addington during the Peace of Amiens.

Background and detail

Design and Rates. Pitt's new tax was graduated (progressive) rather than flat. It began at a levy of 2 old pence in the pound (1/120) on annual incomes over £60, equivalent to £6,666 as of 2025, and increased up to a maximum of 2 shillings (10 per cent) on annual incomes of over £200.

Fiscal Results. Pitt hoped the new income tax would raise £10 million, but receipts for 1799 totalled just over £6 million, falling well short of his expectation. The tax remained in force until 1802, when Henry Addington, who had taken over as prime minister in 1801, abolished it during the Peace of Amiens.

People involved

  • William Pitt the Younger · Statesman who announced the income tax in his December 1798 budget and introduced it in 1799
  • Henry Addington · Successor who had taken over as prime minister in 1801 and abolished Pitt's income tax in 1802 during the Peace of Amiens

Sources

  1. Taxation in the United Kingdom Wikipedia, revision of 2026-09-09

Machine-drafted from the cited Wikipedia passages and checked by a reviewing model, not by a human editor. Every passage cites the revision it was written from; dates and places follow those passages.