The Clown's Mistress. Income tax evasion: ideal and reality in mid-Victorian Britain relating to the detection of and punishment for evading the income tax

In the mid-nineteenth century, the assessment of the income tax wasentrusted to personnel who were independent of the Board of InlandRevenue and this constitutional division between local and centralauthority was the corner-stone of the Victorian income tax. It wasenvisaged that the punishment for evasion, too, should be dealt withessentially at a local level and the statute provided for severaldifferent means by which this could be achieved. It soon became clear,however, that such a system was ill-equipped to deal adequately withunder- or non-assessment, because the sanctions by which penalties couldbe imposed were ineffectual both as a deterrent and as a punitive measurein instances of substantial and protracted evasion.In the third quarter of the nineteenth century, events occurred throughwhich the Board was able, effectively, to seize the reins of assessmentand to forge a method of punishment for evasion and it is thisextra-statutory scheme which formed the nucleus of the modern system ofpunishing income tax evasion. The dissertation begins in 1842, the year inwhich the income tax was re-introduced as a temporary visitant and endsin 1880, the year in which the management of the income tax was mappedout as, more or less, a permanent feature of the fiscal scene. During thisperiod, the method of dealing with tax evasion metamorphosed from onewhich was, in the main, in the grasp of the local administration to-onewhich was largely in the hands of the Inland Revenue Department. Thatthis change took place without legislative intervention was theculmination of the social and administrative stresses and tensions thatwere tested by the operation of the income tax, which it is the purpose ofthis dissertation to explore.