The past and future of VAT

VAT was introduced in April 1973 as the first of several new taxes. It was quickly followed by capital duty (1973) development gains tax (1973) capital transfer tax (1974) petroleum revenue tax (1974) and development land tax (1976). These changes followed soon after the introduction of corporation tax (1965) capital gains tax (1965) selection employment tax (1966) general betting duty (1966) unitary income tax and decimal currency. A wealth tax was proposed in 1974 but not introduced.

The year 1973 was also when Britain joined the Common Market (now European Union) and was the start of a period of high inflation and industrial unrest that lasted into the 1980s.

Before VAT the UK had two sales taxes: excise duties and purchase tax. Excise duties are still with us but are now restricted to oil liquor tobacco gambling and motor...