7 Weird & Wonderful Tax Facts

I was going to start this blog with a quip about how tax isn’t a popular topic, but a quick search on Google Trends shows that it ranks as highly as ‘holidays’, and above ‘shoes’, ‘music’ and ‘tennis’ for search interest! So tax is actually quite a popular topic. Well, since everyone’s clearly so interested in the subject, here are some weird and wonderful facts about it.

The non-doms con’s on

Someone registered as non-domiciled with HM Revenue and Customs is tax resident in the UK but is not required to pay UK tax on income and capital gains earned overseas. This hit the headlines in April 2022 when the press called into question the non-dom status of Akshata Murty, the wife of UK Chancellor Rishi Sunak. Introduced in 1799 by King George III when Britain was fighting France, non-dom status initially sheltered those with foreign property from the UK’s wartime taxes. It then became a handy way for colonialists to keep all of their overseas income, while still supporting the British Empire. 

These days, non-doms report their overseas earnings in a tax return, opting for “remittance basis”, meaning they only pay UK tax on the income or gains brought to the UK. Annual charges apply after a certain amount of time – £30,000 if the individual has been in Britain for seven of the past nine tax years, and £60,000 if in residence for 12 of the past 14 years. In response to the Murty scandal, the Labour Party have pledged to close Britain’s tax loophole, but not without debate. Some argue – including former Shadow Chancellor Ed Balls – that closing the loophole would cause a net loss in revenue for the UK due to individuals moving elsewhere.

Tax-free spoils of war

The Russia-Ukraine war is no laughing matter, but the Ukrainian authorities raised a few wry smiles when they declared that any seized Russian tanks need not be declared on tax forms.

“Have you captured a Russian tank or armoured personnel carrier and are worried about how to declare it? Keep calm and continue to defend the motherland!” Ukraine’s National Agency for the Protection against Corruption (NAPC) said.

Big tech gives back

It’s common to hear grumbles about multinational companies not paying corporate tax, with the names of Amazon, Facebook, and Starbucks often thrown around. In 2020 though, Google agreed to pay £183m in back taxes to the Irish government. This was part of a move by Alphabet, Google’s parent company, to abandon its previous strategy of moving revenues made in Europe offshore to tax havens, like Bermuda, which had reduced the company’s overseas tax rate to 2.4% (as revealed by Bloomberg).

You’d have to pay me to sport that moustache!

Peter the Great’s beard tax

Russia gets another mention – this time for more light-hearted reasons. This strange tax began in 1705 in Tsarist Russia as part of a wider initiative to reinvent Russian culture. Priced at a few kopecks for peasants, or a hundred roubles or more for nobles or military officials, this tax aimed to encourage the clean-shaven look the Tsar had witnessed on his European travels a few years prior. Subjects were also ordered to wear French or Hungarian jackets, rather than their traditional overcoats, with tailors fined for continuing to sell Russian styles. The Tsar’s men would even cut citizens’ coats down to size if they were too long!

Devout Orthodox Christians were not happy with the tax, believing that man was created in the image of God, including his beard, and therefore to shave it was a sin. Such discontent led to a revolt in Astrakhan, which was brutally crushed, and the tax continued. Peter would continue to feud with the church throughout his reign. He formed a club called the “All-Jesting and All-Drunken Synod of Fools and Jesters” where members dressed as cardinals and bishops and staged mock marriages and ceremonies. Sounds silly, but in such pious times, this friction between church and state was a serious matter.

The Window Tax

Have you ever looked up at an old building and thought “there really should be a window there”. Often you will see a bricked-up space where there clearly was a window before. There are no doubt a few instances in Hamilton Blake’s hometown of Swaffham – an old Norfolk market town. The tax was introduced in 1696 and sought to levy more money from the rich, who had more windows, than the poor, who had less. This worked for the rural poor, but unfairly taxed those on lower urban incomes who lived in multi-windowed tenements, which were counted as one dwelling under the terms of the tax, despite being subdivided between families.

What was initially conceived as a clever method of progressive taxation ran into problems when the rich started to block up windows to get under the lower tax threshold, and new buildings were increasingly built with insufficient windows. No definition of a window was set out, so even the smallest apertures could – and would – be taxed. This led to a further lack of ventilation, making residents more susceptible to outbreaks of typhus, cholera and smallpox. The tax had such an impact that, after a 1766 amendment to include properties with seven or more windows, England and Wales saw the number of houses with exactly seven windows drop by two thirds!

A room without windows is just a walk-in wardrobe darling!

Football wins

Now you’ve got this far, I should reveal that ‘football’ has about three times the search interest of ‘tax’.

Maybe tax should be taxing

Now this one’s from Wikipedia so take it with a pinch of salt, but apparently Adam Hart-Davis – the scientist/broadcaster who fronted HMRC’s “tax doesn’t have to be taxing” adverts – was dropped from his contract when he said in an interview that the tax system was in fact too complex. He said he thought a 30% tax rate should apply to everyone. While that would make things a lot easier for the Hamilton Blake team, we rather like the UK’s complex tax system – and enjoy advising our clients on how to best navigate it 😊