The twentieth century started with high spending, which was based on war spending. The First and Second World Wars both lead to very large increases in public spending and rather smaller increases in tax. The Korean War is reported to have discernible effect, but neither the Falklands (1982) nor the Gulf (1991) conflict seems to have had an impact on spending.
The need for more revenue during the war led to increases in tax rates, increases in the coverage of existing taxes and the introduction of wholly new taxes. Perhaps the most dramatic change was to income tax. Prior to the war, income tax had never been a mass tax. It was first introduced in 1799, and was permanently in place from 1842, but there were still fewer than 4 million taxpayers in 1938. By the end of the war, the number of taxpaying families had increased to over 12 million, an increase which was sustained into the following decades.
The two marked periods of growth in the last quarter of the century, in the early 1980s and the late 1980s / early 1990s; both the period experienced turmoil in the economic activities of the country, which led both to shrinking GDP and to higher cyclical government spending as unemployment increased gradually. ...
rpreted as, for each UK household the government allocated 14,000 and 15,000, the amount is equivalent to the post-tax income a childless couple would need to be in the middle of the income distribution, or the amount required by the retired UK national. Local taxes have been important type of revenue for UK economy, it accounted for one third of total revenues, however is importance declined after World War I and II, . 'In the early twentieth century, these accounted for up to a third of total revenues, but their importance declined as the taxes required to pay for both World Wars were raised at the national level', (A. Dilnot and C. Emmerson, 'The economic environment', in A. H. Halsey with J. Webb, Twentieth Century British Social Trends, Macmillan, Basingstoke, 2000). Revising the British history of tax returns, local taxes, (chiefly a property tax called 'rates', which had both business and household components) were estimated to be seven percent of GGR. However after 1960, the local taxes represented more than 10 percent of GGR, and have remained consistent through out. However from 2000 onwards, local taxes have again become much less significant, representing only between 3 and 4 per cent of revenues in the last decade of the twentieth century. The study concluded that, 'This is because the council tax, like its predecessor the community charge (popularly known as the poll tax), raises less revenue than did domestic rates (which were abolished in 1990), and also because in 1991 non-domestic rates became a central government tax, the revenue from which is redistributed to local authorities'. Furthermore, 'In contrast to the current UK position, in federal countries such as the USA and Germany, around a third of government revenues can be collected through