In Britain, the main form of taxation remained indirect taxation on goods until the early 1900s. Since taxes essentially go hand in hand with expenditure, changes in taxation generally correlate to changes in what the state is doing. Until the 1900s, most taxes were used to support first the cost of military and wars, and then the monarchy, and a small civil service. This means taxes react most to warfare: taxes will rise during and after major wars, and then subside between them.

Compared to other European countries, Britain actually has a fairly large civil service and standing military in the 1700s, which required more regular taxation. Taxes were collected through indirect taxes on goods, which would be assessed when items were imported or produced, and marked with a stamp or seal. Smuggling is a way to avoid this, and thus the side-industry of some costal towns. (Discussion of “stamp acts” are discussions of taxation) Taxation in Britain is actually fairly centralized in this period: new taxes have to be approved by the House of Commons and are collected/overseen by the Treasury Department and its staff. Britain moves more quickly away from tax farming (relying on an intermediary landowner to collect taxes from tenants) compared to other nations in this period. This more accountable fiscal system is one explanation for Britain’s comparative political stability through the eighteenth and nineteenth century. (source: Brewer, Sinews of Power, 1989) Of course, not everyone thinks the British fiscal system is great-- new taxes introduced to pay off war debt following the seven years prompt unrest in the North American colonies.

Income tax is suggested and sometimes implemented for short periods of time through the 1800s, but it is not seen as a viable long term solution. Britain definitely has the records and administration to start collecting more direct taxes in this era, but through the 1800s the mainstream governing philosophy is essentially small government, limited taxation. Britain is fighting fewer wars through this period, and most social services are either private or charitable, so it's possible to support the state through indirect taxation alone. When income taxes are collected, they’re levied on a small number of very wealthy people and is not a comprehensive system. (source: Biagini, Liberty, Retrenchment and Reform, 1992)

The big change in tax policy comes when people start calling on the state to provide more services. In 1906 Lloyd George introduced the “People’s Budget,” which proposed both income and land taxes to support expanding state services for children and old age pensions; a version of this passed in 1911. This is resisted by a lot of the landowning aristocracy and blocked by the House of Lords, and the implementation of a land tax certainly contributed to the end of many large country estates. (source: Cannadine, The Decline and Fall of the British Aristocracy, 1990) This sets the course towards today’s tax system, which relies on both direct and indirect taxes to support a larger set of services.