As far back as 1799, when Mr. Pitt was in power, graduated duties on income were imposed, beginning with £60 per annum. It was not, however, until Sir Robert Peel came into office in 1841 that the now familiar income tax became a permanent impost. In the Session of 1842 Parliament sanctioned the Premier's proposition for a 7d. rate, to be continued for three years. It produced about £5,350,000 annually, and led to the repeal of £12,000,000 of indirect taxes. In 1845 and again in 1848 the income tax was renewed at the same rate. In 1851 and in the two following years it was continued; and in 1853 a hope was held out that in seven years it might be gradually reduced in amount, if not extinguished altogether. All incomes between £100 and £150 were, however, to be liable to a rate of 5d. during that time. In 1854 the rates were doubled, thus standing at 14d. for the larger incomes and 10d. for the smaller; and in the following year 2d. more was added to the former and 1½d. the latter. In 1857 the rates dropped to 7d. and to 5d., and in the next year both became 5d. In July, 1859, the rates were raised to 9d. and 6½d. respectively; in 1860 they were further advanced to 10d. and 7d. In 1862 the rates were 9d. and 6d.; in 1863 there was a uniform tax of 7d., and incomes below £200 were allowed an abatement of £60. In 1864 the rate was 6d.; in 1865 it was reduced to 4d.; and here it remained until November, 1867, when 1d. was added to meet the expenses of the Abyssinian war. In April of last year it was increased to 6d. Mr. Lowe proposes now to reduce it to 5d.
Source: The Illustrated London News, Vol. LIV, April 17, 1869, p.393