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INCLOSURE—INCOME TAX

INCLOSURE, or ENCLOSURE, in law, the fencing in of waste or common lands by the lord of the manor for the purpose of cultivation. For the history of the in closure of such lands, and the legislation, dating from 123 5, which deals with it, see COMMONS.


IN COENA DOMINI, a papal bull, so called from its opening words, formerly issued annually on Holy Thursday (in Holy Week), or later on Easter Monday. Its first publication was in 1363. It was a statement of ecclesiastical censure against heresies, schisms, sacrilege, infringement of papal and ecclesiastical privileges, attacks on person and property, piracy, forgery and other crimes. For two or three hundred years it was varied from time to time, receiving its final form from Pope Urban VIII. in 1627. Owing to the opposition of the sovereigns of Europe both Protestant and Catholic, who regarded the bull as an infringement of their rights, its publication was discontinued by Pope Clement XIV. in 1770.


INCOME TAX, in the United Kingdom a general tax on income derived from every source. Although a graduated tax on income from certain fixed sources was levied in 1435 and again in 1450, it may be said that the income tax in its present form dates in England from its introduction by W. Pitt in 1798 “ granting to His Majesty an aid and contribution for the prosecution of the war.” This act of 1798 merely increased the duties of certain assessed taxes, which were regulated by the amount of income of the person assessed, provided his income amounted to £60 or upwards. These duties were repealed by an act of 1799 (39 Geo. III. c. 13), which imposed a duty of I0% on all incomes from whatever sources derived, incomes under £60 a year being exempt, and reduced rates charged on incomes between that amount and £200 a year. The produce of this tax was £6,046,624 for the first year, as compared with £1,855,996, the produce of the earlier tax. This income tax was repealed after the peace of Amiens, but the renewal of the war in 1803 caused its revival. At the same time was introduced the principle of “ collection at the source ” (i.e. collection before the income reaches the person to whom it belongs), which is still retained in the English Revenue system, and which, it has been said, is mainly responsible for the present development of income tax and the ease with which it is collected. The act of 1803 (43 Geo. III. c. 122) distributed the various descriptions of income under different schedules, known as A, B, C, D and E. A rate of 5 % was imposed on all incomes of £1 50 a year and over, with graduation on incomes between £60 and £1 50. This income tax of 5% collected at the source yielded almost as much as the previous tax of IO(%) collected direct from each taxpayer. The tax was continued from year to year with the principle unchanged but with variations in the rate until the close of the war in 1815, when it was repealed. It was, during its first imposition, regarded as essentially a war tax, and in later days, when it was reimposed, it was always considered as an emergency tax, to be levied only to relieve considerable financial strain, but it has now taken its place as a permanent source of national income, and is the most productive single tax in the British financial system. The income tax was revived in 1842 by Sir R. Peel, not as a war tax, but to enable him to effect important financial reforms (see TAXATION). Variations both in the rate levied and the amount of income exempted have taken place from time to time, the most important, probably, being found in the Finance Acts of 1894, 1897, 1898, 1907 and 1909-1910. It will be useful to review the income tax as it existed before the important changes introduced in 1909. It was, speaking broadly, a tax levied on all incomes derived from sources within the United Kingdom, or received by residents in the United Kingdom from other sources. Incomes under £160 were exempt; an abatement allowed of £160 on those between £160 and £400; of £ISO on those between £400 and £500; of £120 on those between £500 and £600, and of £70 on those between £600 and £700. An abatement was also allowed on account of any premiums paid for life insurance, provided they did not exceed one-sixth of the total income. The limit of total exemption was fixed in 1894, when it was raised from £150§ and the scale of abatement's was revised in 1898 by admitting incomes between £500 and £700; the Finance Act 1907 distinguished between “ earned ” and “ unearned ” income, granting relief to the former over the latter by 3d. in the pound, where the income from all sources did not exceed £2000. The tax was assessed as mentioned above, under five different schedules, known as A, B, C, D and E. Under schedule A was charged the income derived from landed property, including houses, the annual value or rent being the basis of the assessment. The owner is the person taxed, whether he is or is not in occupation. In England the tax under this schedule is obtained from the occupier, who, if he is not the owner, recovers from the latter by deducting the tax from the rent. In Scotland this tax is usually paid by the owner as a matter of convenience, but in Ireland it is by law chargeable to him. All real property is subject to the tax, with certain exceptions 1-(a) crown property, such as public offices, prisons, &c.; (IJ) certain properties belonging to charitable and educational bodies, as hospitals, public schools, colleges, almshouses, Src.; (0) public parks or recreation grounds; (d) certain realities of companies such as mines, quarries, canals, &c., from which no profit is derived beyond the general profit of the concern to which they belong. Under schedule B were charged the profits arising from the occupation of land, the amount of such profits being assumed to be one-third of the annual value of the land as fixed for the purposes of schedule A. This applies principally to farmers who might, if they chose, be assessed on schedule D on their actual profits. Schedule C included income derived from interest, Src., payable out of the public funds of the United Kingdom or any other country. Schedule D, the most important branch of the income tax and the most difficult to assess, included profits arising from trade, from professional or other employment, and from foreign, property, the assessment in most cases being made on an average of the receipts for three years. Schedule E covered the salaries and pensions of persons in the employment of the state or of public bodies, and of the officials of public companies, &c. The method of assessment and collection of the tax is uniformly the same. Unden schedules A, B and D it is in the hands of local authorities known as the General or District Commissioners of Taxes. They are appointed by the Land Tax Commissioners out of their own body, and, as regards assessment, are not in any way controlled by the executive government. They appoint a clerk, who is their principal officer and legal adviser, assessors for each parish and collectors. There is an appeal from their decisions to the High Court of Justice on points of law, but not on questions of fact. Assessments under schedules A and B are usually made every five years, and under schedule D every year. The interests of the revenue are looked after by officers of the Board of Inland Revenue, styled surveyors of taxes, who are stationed in different lparts of the country. They are in constant communication with the Board, and with the public ion all matters relating to the assessment and collection of the tax; they attend the meetings of the local commissioners, examine the assessments and the taxpayers' returns, and watch the progress of the collection. There are also certain officers, known as special commissioners, who are appointed by the crown, and receive fixed salaries from public funds. For the purpose of schedule D, any taxpayer may elect to be assessed by them instead of by the local commissioners; and those who object to their affairs being disclosed to persons in their own neighbourhood may thus have their assessments made without any risk of publicity. The special commissioners also assess the profits of railway companies under schedule D, and profits arising from foreign or colonial sources under schedules C and D. The greater part of the incomes under schedule E is assessed by the commissioners for public offices, appointed by the several departments of the government.

Previously to 1909 the rate of income tax has been as high as 16d. (in 1855-1857), and as low as 2d. (in 1874-1876). Each penny of the tax was estimated to produce in 1906-1907 a revenue of £2,666,867.1

It had long been felt that there were certain inequalities in the income tax which could be adjusted without any considerable difficulty, and from time to time committees have met and reported upon the subject. Select committees reported in 1851-1852 and in 1861, and a Departmental Committee in 1905. In 1906 a select committee was appointed to inquire into and report upon the practicability of graduating the income tax, and of differentiating, for the purpose of the tax, between permanent and precarious incomes. The summary of the conclusions contained in their Report (365 of 1906) was:- ', 1. Graduation of the income tax by an extension of the existing system of abatement's is practicable. But it could' not be applied to all incomes from the highest to the lowest, with satisfactory results. The limits of prudent extension would be reached when a large increase in the rate of tax to be collected at the source was necessitated, and the total amount which was collected in excess of what was ultimately retained became so large as to cause serious inconvenience to trade and commerce and to individual taxpayers. Those limits Full statistics of the yield of income tax and other information pertaining thereto will be found in the Reports of the Commissioners of His Majeslylv Inland Revenue (published annually); those issued in 1870 and in 1885 are especially interesting.