2 - The Present System and its Administration

Abstract

This chapter describes the present taxation system and its administration. Income tax was first introduced in the United Kingdome in 1799 as a temporary tax to pay for the Napoleonic wars. It was abolished in 1815 and reintroduced in 1842, still as a temporary tax that had to be reintroduced each year by means of an annual budget. The present law still provides that the income and other direct taxes lapse unless reintroduced by means of an annual budget. The only change has been that to run the economy, chancellors of the exchequer have found that more than one budget per year is often required. The day-to-day administration of income tax, capital gains tax, development land tax, corporation tax, capital transfer tax, oil taxation, and stamp duty is in the hands of the Board of Inland Revenue with a staff of over 70,000 people. The technical division is divided into three sections and the management division into five. These specialized offices deal with stamp duty, development land tax, superannuation funds, and foreign taxed income, as well as capital transfer tax.