Often one of the most controversial and misunderstood subjects that anyone can study or read about in the newspapers, tax planning in various forms has been around for centuries. In the following article, I outline a number of tax planning strategies that were adopted to avoid some of the more obscure taxes in the UK that were in place several hundred years ago.
In its wisdom, the UK government at one point decided to tax windows (not the Microsoft Software), on the basis that only affluent individuals would have the required money to be up to pay for something as extravagant as window. Clearly something which is now a day-to-day necessity in terms of enabling light to enter the house, was once seen as a luxury. In order to get around paying window tax, it was often easy to brick-up Windows and stop and light getting in, therefore mitigating one’s liability to window tax. Wandering around cities such as London today, you can often see windows in old buildings that have been bricked up. This practice, and the practice of taxing such windows leads itself to the common phrase ‘daylight robbery’.
Income tax was brought into play, in order to finance the building of troops and artillery in order to be able to fight the French. Previous to this there was no such thing as income tax, indirect taxes were charged on consumables, a primitive form of value added tax in order to raise revenues.
Amusingly, there was also a tax on hats, as it was viewed by the government that the bigger the hat you have the more money you had, and therefore the more tax you pay the Treasury. The most basic tax planning that one could ever use in these days, was by wearing a shorter hat, or to mitigate one’s liability to have tax permanently, one didn’t wear a hat. Tax planning has always been around and will continue to do so as long as governments continue to levy charges on individuals for consuming items or for their lifestyle choices.