HM Excise


His or Her Majesty's Excise refers to 'inland' duties levied on articles at the time of their manufacture. Excise duty was first raised in England in 1643. Like HM Customs, the Excise was administered by a Board of Commissioners who were accountable to the Lords Commissioners of the Treasury. While 'HM Revenue of Excise' was a phrase used in early legislation to refer to this form of duty, the body tasked with its collection and general administration was usually known as the Excise Office.
In 1849 the Board of Excise was merged with the Board of Stamps and Taxes to form a new department: the Inland Revenue. Sixty years later the Excise department was demerged from the Inland Revenue and amalgamated with HM Customs to form HM Customs and Excise.

Organisation

Following the example of HM Customs, the Board of Excise set up a network of administrative areas called 'Collections'. Unlike HM Customs, the Excise operated inland as well as on the coast: initially it had 39 Collections in England and 4 in Wales; later its remit was extended to cover Scotland and Ireland as well. The Collections were subdivided into Districts, which themselves had smaller subdivisions, known either as Rides or Divisions, which were covered by an Excise Officer on foot.

Personnel

Each Excise Collector was required to tour his Collection eight times a year, visiting each Market Town in turn in order to hold 'sittings' and receive revenue payments. In the intervening time, locally based Excise Officers would make regular visits to the manufacturers and retailers in order to assess the duty payable on relevant items and to issue 'vouchers' summarizing the duty owed. Meanwhile, the Supervisors would make regular spot-checks on the excisemen in their Districts and report any anomalies or errors in their accounts.
This pattern of work remained the norm through the 18th and 19th centuries. In the 1820s, an excise officer wrote a detailed description of his daily routine, spent visiting a series of different manufacturers and retailers: chandlers, brewers, innkeepers, tanners, maltsters, distillers and tea and tobacco merchants. The excise officer carried various specialist items of equipment for testing and measuring different dutiable products; for example the Sikes hydrometer.

Excise licences

In order to be able to regulate and inspect the manufacture of dutiable products, the Excise Office issued licences to manufacturers. Traders in some items were similarly licensed. In the late 18th century a duty was imposed on the licences themselves: Excise Licence duty had to be paid in addition to any duty payable on the goods that were being manufactured or traded under licence.

Headquarters

Initially, in 1643, the Excise Office had a headquarters in Broad Street in the City of London. Thereafter, as it expanded, it leased successively larger properties in and around the City. Having returned to Broad Street in the 1670s, the Excise moved out again in the early 1700s, only to move back in 1769.
This new Excise Office in Broad Street was designed by George Dance the Elder and built on the site of Gresham College: it consisted of two ranges, one of stone, the other of brick, with a spacious courtyard laid out between them. The Excise remained there until 1852, when its staff moved to join the other departments of the newly-formed Inland Revenue in Somerset House.

History

17th century

On 22 July 1643, the Long Parliament passed the 'Excise Ordinance' to raise money for the maintenance of Parliamentary forces. The ordinance established a board of eight Commissioners to oversee the collection of this revenue. Duty was initially levied on beer, cider, spirits and soap, but the list of dutiable items grew year by year and before long excise duty was being levied on such day-to-day necessities as meat, fish, clothes and leather, prompting public resentment.
After the Restoration the Excise was retained; duty was levied on beer and ale, cider and perry, aqua vitae and the Coffee House beverages of tea, coffee, chocolate and sherbet. The rights to the revenue of excise were granted to the King, in lieu of certain feudal dues and royal hereditary rights which had lately been abolished. For this purpose the revenue received was divided in two: 50% was granted to the monarch and his heirs in perpetuity, the other 50% was granted to Charles II for life..
From 1662 Excise revenue was farmed on and off until a Board Commissioners of Excise was established on a permanent footing in 1683. In addition to excise revenue, the Board and its officers were required to collect hearth money until the latter was abolished in 1689.
Following the Glorious Revolution of 1688, with the English Army expanding and fighting multiple campaigns, levels of duty were increased and new duties were raised: beer duty was doubled and over the next twenty-five years such diverse commodities as salt, glass, malt, candles, hops, leather, windows, wire, soap, paper and starch all became subject to excise duty. The distribution of Excise officers around the country meant that they were sometimes called upon to act for other branches of government; for example in 1693 they were called upon to provide annual statistics on inns and taverns to the Secretary at War.

18th century

After the Act of Union 1707 a separate Excise Board was established for Scotland. When malt duty was imposed there in 1725 it caused widespread outcry and opposition.
The Excise was now seen as an efficient and effective means of raising revenue and Robert Walpole sought to make the most of it. Seven years later he began to explore the possibility of using the Excise to counter problems of fraud and smuggling related to imported goods – particularly wine and tobacco – within the remit of HM Customs. When he presented his proposals to Parliament in 1733 it prompted a full-blown 'Excise Crisis': there was public frenzy, fuelled by fears that the Bill marked the first stage of a General Excise being imposed on all manner of domestic goods and other articles. When the Bill was withdrawn there were widespread celebrations.
In the wake of the crisis no new excise duties were introduced for the next fifty years. When, however, William Pitt the Younger arrived as Prime Minister, he brought with him a determination to raise revenue more effectively by way of the Excise service. A duty on bricks was introduced in 1784, as was the duty on excise licences. Then, in 1786, Pitt revisited the proposals embodied in Walpole's withdrawn Excise Bill of 1733: the intention had been to reduce customs duty on imported wine and tobacco to a nominal amount and instead impose an Excise duty; on arrival, the goods would be placed directly in a bonded warehouse where they would remain under Excise control. Despite opposition from affected merchants and retailers, the Bill was passed. The gamble paid off and within a few years the duty on tobacco had established itself as Britain's most productive form of revenue. Thereafter, the developing war with France had prompted the introduction of new forms of duty and further increases.
In due course, the warehousing system proved advantageous to the traders since duty was only payable on the removal of goods from the warehouse. This enabled them to delay paying duty until the goods were sold. In 1803 an Act was passed allowing the warehousing of all types of goods liable to Excise duty, and new warehouses were built in ports all round the country.
Smuggling remained a problem with which both Excise and Customs officers were now having to engage. As part of their response, both services were provided with revenue cutters. The Excise Board had a fleet of seven cutters in operation by 1784; HM Customs had twenty vessels of its own and two dozen more under contract.

19th century

In 1823 the thitherto separate Boards of Commissioners for England, Scotland and Wales were consolidated into a single UK-wide Board of Excise.
During and after the Napoleonic Wars, the number and level of excise duties had continued to grow. From the 1820s, however, this trend began to be reversed; by 1840 the number of duties levied had reduced from twenty-seven to ten. Salt duty was repealed first, in 1825, followed by the long-standing excise duties on beer and cider. Also in 1825 the somewhat anomalous situation whereby import duties were collected by the Excise Office came to an end, with responsibility for these being handed back to HM Customs.
In 1830, Sir Henry Parnell published an influential treatise On Financial Reform, which argued for the repeal of duties on the raw materials for building and manufacturing in order to encourage manufacturing, the repeal of duties on items otherwise involved in manufacturing processes and the reduction of excise duty on wine and tobacco ; in order to counterbalance these proposed reductions Parnell argued for the introduction of taxes on property and on income.
The following year the duties on leather and on printed cotton were repealed, followed by that on candles. Where excise duties remained in place the requirement for officers to monitor the manufacturing process was reduced.

Amalgamations

During the 1840s the Excise Office contracted as further duties were repealed. Before long, plans were being drawn up to merge the much-reduced department with the Board of Stamps and Taxes. The merger was achieved after Parliament passed the Inland Revenue Board Act in January, 1849.
The reduction in excise duties continued post-amalgamation, with duties being repealed on bricks, soap and paper. In 1880 malt duty followed suit; but it was replaced by a new excise duty on beer. In addition, the excise staff inherited responsibilities from other departments of the Revenue, such as railway passenger duty and 'establishment licences' by which duty was payable on such luxuries as carriages, menservants and the display of armorial bearings.
In the early 20th century a decision was taken to unite the two Boards responsible for indirect taxation; the Board of Customs and Excise was formed in 1909, leaving the Inland Revenue to administer direct taxes.

List of excise duties (1643-1909)

The following duties were levied by the Excise Office and by the Excise Department of the Inland Revenue :
  • Beer
  • Cider
  • Salt ;
  • Soap
  • Vinegar
  • Spirits
  • Tea
  • Glass
  • Made-wine
  • Malt
  • Candles
  • Hops
  • Leather
  • Paper
  • Wire
  • Starch
  • Bricks
  • Tiles
  • Plate
  • Cotton prints
  • Auctions
  • Wine
  • Licences see below
  • Railway passengers ; had previously been subject to stamp duty
  • Sugar
  • Racehorses ; previously an assessed tax
  • Chicory
  • Saccharin

List of excise licence duties

From 1784 an excise duty was payable on licences taken out by manufacturers and traders of dutiable goods, including brewers, maltsters, distillers, glassmakers, paper manufacturers, soap-makers, publicans, vintners, tobacco and snuff dealers and retailers, and traders in coffee, tea, cocoa-nuts, chocolate and pepper. Licence duty often remained payable even if duty on the product itself had been repealed.
In addition, licence duty was payable by or for :
  • Appraisers ; previously subject to stamp duty
  • Armorial bearings ; previously an assessed tax
  • Auctioneers
  • Carriages ; previously an assessed tax
  • Dogs ; previously an assessed tax
  • Guns
  • Game ; previously an assessed tax
  • Hackney carriages
  • Hawkers
  • House agents ; previously subject to stamp duty
  • Male servants ; previously an assessed tax
  • Sellers of Patent Medicine ; previously subject to stamp duty
  • Pawnbrokers ; previously subject to stamp duty
  • Plate-dealers ; previously subject to stamp duty
  • Playing card makers & sellers ; playing cards had previously been subject to stamp duty
  • Post horses ; previously subject to stamp duty
  • Saddle and carriage horses ; previously an assessed tax
  • Motor vehicles