As this was prior to Ireland leaving the United Kingdom, these returns were broken down into the three Kingdoms of England, Scotland and Ireland. As was the practice at the time, the figures for Wales were included in the figures for England.
Clearly these were very different times in the life of the UK. The British Empire was at its height and there was barely any welfare state and no National Health System. As such, the tax and expenditure profile for the UK looked very different to today.
We will use 1899-1900 as an example to illustrate this.
Revenue 1899-1900
Unlike today, the bulk of government income was from Customs and Excise with income tax only forming 15% of total taxation, whereas today Income tax and National Insurance make up 42% of the total.
- Customs (Import Taxes) alone made up for 18% of 1899-1900's revenue, largely fueled by the UK's insatiable appetite for tea, tobacco and foreign spirits.
- Excise duties are made up of taxes on the UK production and sale of certain goods such as whisky and beer. These netted the exchequer 25% of all revenue.
- Estate Duty was imposed on inheritance of land and other properties. This was, remarkably, responsible for 11% of all government income, compared to just under 1% for 2016-2017.
- The remainder of government tax income was made up of Stamp Duty, Land Taxes and House Duty.
The UK government also received substantial non-tax income, 16%, from sources such as the Post Office, the Telegraph Service and Suez Canal.
The UK's total government income in 1899-1900 was £128,813,000. This represents around 10% of GDP, compared to government income of 33.2% of GDP in 2016.
Expenditure 1899-1900
As well as there being vast differences in the revenue profile, government expenditure also had a very different composition to today:
- The Navy and the Military, alone, accounted for 48% of all government spending.
- The national debt accounted for a further 16%.
- Running the post office amounted to 9%, while facilitating the collection of taxes made up 2% of all government spend.
- The consolidated fund, largely paying for the civil list and key government positions, amounted to 1%, leaving 16% of spend for 'voted' spending.
- As this was prior to any functioning welfare state or National Health System, the largest single cost in this voted spending was public education, at 8% of all UK spending.
Comparing these numbers to 2016-2017, where defence spending was only 4.8% of the total and debt repayments were only 5.1%, we can see how very different the role of the UK Government was at the turn of the 20th century.
Total UK expenditure in 1899-1900 was £143,687,000, leading to a deficit of £14,874,000.
As we can see from charts below, over the 21 years from 1900 to 1921 this distribution of revenue sources changed somewhat with a gradual decrease of income from Customs and Excise and an increase in both personal taxation and corporate taxes, including the introduction of an Excess Profits Duty in 1915-1916.