Stamp duty in the United Kingdom

Stamp duty in the United Kingdom is a form of tax charged on legal instruments (written documents), and historically required a physical stamp to be attached to or impressed upon the document in question.[1][2][3] The more modern versions of the tax no longer require a physical stamp.

History of UK stamp duties

An 1875 £3 chancery revenue stamp of the United Kingdom.

Stamp duty was first introduced in England on 28 June 1694, during the reign of William III and Mary II, under "An act for granting to their Majesties several duties upon vellum, parchment and paper, for four years, towards carrying on the war against France".[4] In the 1702/03 financial year 3,932,933 stamps were embossed in England for a total value of £91,206.10s.4d.[5] Stamp duty was so successful that it continues to this day through a series of Stamp Acts. Similar duties have been levied in the Netherlands, France and elsewhere.

During the 18th and early 19th centuries, stamp duties were extended to cover newspapers, pamphlets, lottery tickets, apprentices' indentures, advertisements, playing cards, dice, hats, gloves, patent medicines, perfumes, insurance policies, gold and silver plate, hair powder and armorial bearings.[6]

The attempted enforcement of the Stamp Act 1765 in the British colonies in America led to the outcry of "no taxation without representation". The argument over stamp duty contributed to the outbreak of the American War of Independence.

Until 1793 stamp duty was always imposed as a fixed amount, regardless of the size of the transaction. In 1808 stamp duty on conveyances of sale, including transfers of land and shares, became an ad valorem tax.[7]

Historically, stamp taxes were administered by the Board of Stamps. This merged with the Board of Taxes in 1833/34, and the Board of Inland Revenue was created under the Inland Revenue Board Act 1849 by merger of the Board of Excise and Board of Stamps and Taxes. Stamp taxes were then administered by the Inland Revenue Stamp Taxes business stream (formerly the Stamp Office). Another merger occurred in 2004, when the Inland Revenue and HM Customs & Excise formed HM Revenue & Customs which now itself manages stamp duty.

The Stamp Duties Management Act 1891 and the Stamp Act 1891 still contain much of the operative law on stamp duties, although there have since been significant amendments and a partial consolidation was made in the Finance Act 1999. The Stamp Act 1891 was the inspiration for many of the older Australian stamp duty Acts.

Between 1782 and 1971, a tax was charged on cheques in the United Kingdom. The charge was one penny until 1918, when Chancellor of the Exchequer Bonar Law raised it to twopence. The tax was abolished shortly before decimalisation.[8]

The "Stamp Duty Paid" mark that appeared on British cheques from 1956 to 1971.

List of items subject to Stamp Duty

The Stamps Act of 1694 imposed Stamp Duty on a range of legal instruments.[9] During the early part of the 18th century, the duty was extended to cover a number of other paper items (plus dice, which were stamped on their packaging) including the following:

  • Playing cards (1711-1960) (became excise duty from 1864)
  • Dice (1711-1862)
  • Almanacks (1711-1834)
  • Advertisements (1712-1853)
  • Newspapers (1712-1855)

Later, because of the perceived efficiency of Stamp Duty as a means of raising revenue, Stamp Duty was levied on a whole variety of items, whether or not paper-based, including:

  • Patent medicines (1783-1941)
  • Gold and silver plate (1783-1890) (Stamp duty was also payable on licences to deal in plate)
  • Hats (1784-1811)
  • Game certificates (1784-2007) (became assessed tax from 1808 and excise licence from 1860)
  • Gloves and mittens (1785-1794)
  • Attorneys' and solicitors' licences (1785-1949)
  • Pawnbrokers' licences (1785-1974) (excise licence from 1864)
  • Hair powder (1786-1800)
  • Perfumes and cosmetics (1786-1800)
  • Receipts (1795)
  • Paper (1795)
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