Bricking up your Windows – a Historic Tax Scheme?


Andy Wood

Andy is a practical, creative tax adviser who assists a variety of clients in achieving their personal and commercial objectives in the most tax efficient manner.

Bricking up your windows and tax

HMRC were talking about a window tax a few days ago.

Before you panic, they weren’t consulting on its introduction, but it was raised in a tweet as an early example of tax avoidance.

But is it really?

A history of the window tax

First things first. For those who aren’t up to speed on their historical glazing economics, the window tax was introduced in 1696.

Early versions of Whillan’s tax tables would have shown that houses with a lower number of windows, initially ten, were subject to a reduced ‘house tax’. However, they were exempt from the window tax.

Those (un)lucky house dwellers who exceeded this ten window threshold were liable for the window tax. The tax increasing, dependent on the number of windows in the property.

As it was the poor who tended to live in houses with fewer windows they were, in general terms, taxed less vigorously. In these terms, it was very progressive.

Hopefully this is not giving John McDonnell MP any ideas.

The liability for the window tax fell on the landlord. So, as you might guess, many of these windows were boarded or bricked up to reduce their tax liability. New buildings sprung up with fewer and fewer windows.

Just like present day, the draughtsman also made a bit of a Horlicks of things. For example, there was no definition of ‘window’.  Apparently, this lead to over zealous tax inspectors attempting to collect tax for the smallest cracks in walls and in some cases ‘even perforated grates in larders’.

Again, common with today’s legislator, there was no thought to the unintended consequences of these tax measures. In this case, the unintended consequences being the deleterious effect that the tax provisions had on the health of the population.

In a report made to a committee for health in the North East in 1845, the following was stated:

“…the very evil effect and operation of the window tax; and they do not hesitate to declare that it is their unanimous opinion that the blocking up of the numerous windows caused by the anxiety of their owners to escape the payment of the tax, has, in very many instances, greatly aggravated, and has even…in some cases been the primary cause of much sickness and mortality…”

The most remarkable thing is that the window tax was not repealed until 1851!

Another brick in the wall – tax avoidance?

Coming back to my point. At last I hear you say.

Let us say that the Government read this article and think “We’ll have a piece of that. We only need to hire a few inspectors with clipboards and we can send them out counting windows.”

As a result, Phillip Hammond announces that the Government, as it is ‘the right thing to do’, is going to introduce a new window tax from April 2019. If you have more than 10 windows you will have to pay it. The more windows you have, the more you will pay.

There will be a special surcharge on French doors (British doors all the way following Brexit – we can finally take control of our doors. Nigel Farage promised.)

I consult the draft legislation and leg it down to Travis Perkins to buy some bricks and mortar (and one of those trowel-y things) and start blocking up the windows. I can then sit back in the dark thinking how clever I’ve been.

Of course, HMRC’s tweet was light-hearted but would I really be avoiding tax? Am I defeating the intention of Parliament?

Clearly, I have reduced my tax bill. However, I have also reduced the amount of light in my house and, if the consequences of the window tax are repeated, increased my chances of typhus and cholera.

If one wants to pay less window tax, have fewer windows. If one wants to pay less SDLT buy a cheaper house. If one wants to pay less duty on cigarettes, give up smoking. If a 50% rate of income tax comes, decide to work part-time. These all strike me as reasonable courses of action in light of the provisions.

The key cannot simply be whether an action reduces one’s taxes. It must also take in whether the action taken to do that was foreseeable by the draughtsman or, alternatively, whether it is contrived and artificial. Finally, does one ‘suffer’ the real (usually economic) consequences of one’s actions?

Who cares?

Who really cares where the line on avoidance is drawn. I think there are a couple of current areas where people are adopting ‘brick in the wall’ type strategies.

What about buy to let landlords who have been hit (and will be hit harder in future years) by mortgage interest relief?

Many of these, by hook or by crook, will have started operating through limited companies in some way because the same restrictions do not apply to companies.

What about people who have used EBT schemes in the past? There is a controversial loan charge that will trigger in April 2019 and will subject any loan taken out since 1999 to a PAYE charge on any amounts outstanding. (This is very much like the window tax though it treats the historic sun light enjoyed in the past as taxable income on 5 April 2019).

Clearly, there are two courses of action here. Firstly, do nothing and pay the charge. The second is to repay the loan.

Should either of these be considered tax avoidance?

My view is a definite no…. But then again I have no view. I’ve just bricked up all my windows

If you have any queries about anything in this article or tax matters in general then please do get in touch

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