Window Tax - A 'pane' for the middle class

I was recently contemplating Window Tax, as you do.  Never let it be said I am anything but up to the minute - this is a tax we had in England between 1696 and 1851. (Oh for the days when you could learn a tax and that knowledge would be good for at least 150 years. We’re lucky now if a new rule lasts a parliament).   

Window tax, as an older and less cumbersome tax, illustrates nicely some of the issues of establishing a tax system. Despite being long gone, its effects are also still visible today when you see old properties with oddly bricked up windows. 

The clue is in the name as back in the 17th and 18th centuries Window Tax was based on number of windows you had.  There was a flat rate for the first ten - later eight - windows, and then it increased in bands thereafter. If you wanted to pay less tax you could reduce the number of windows by bricking one or more up. There was a cost to this in labour and materials, but more so in terms of loss of light and air - which made it very unpopular.  

If you wanted to evade your taxes you bricked some windows up when the man came round to count them and then removed the bricks when he'd gone. A beautiful example of an effectively artificial  transaction with no meaningful consequence other than a bit of temporary inconvenience. Not entirely dissimilar from some aggressive schemes being pursued through the courts today…    

Window tax is also a good illustration of some other perennial tax problems. In a Spectator article of 1834, the paper complained that while initially the average price per window increased with the number of windows, once you reached a certain point it became cheaper the more windows you had.  So a Duke with 200 windows paid less per window than a man with 12. Indeed the cost per window peaked at the size of houses occupied by the middle class. So, even then, the middle class were feeling squeezed.  

Secondly the tax took no account of the size of the window, or the view you looked out on. So a small window in the industrial North paid the same as a window four times its size in central London. This despite the huge difference in values of the two properties and assumed wealth of the occupants.  

It was a relatively simple tax, but it is interesting that even after 100 years the article shows it had not evolved enough to be considered fair.  

Returning to the present day, tax is one of the necessary evils and, whether you feel it is fair or not, it has to be paid. There are however, legitimate steps you can take to minimise your bill. These might include making pension contributions or saving into ISAs or other tax efficient investments.  Early on in the tax year it’s a good idea to spend a little bit of time looking out the window and thinking about your tax position.  

Helen Thornley, Tax Consultant

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