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Innovation and pragmatism in tax design: Excess Profits Duty in the UK during the First World War

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  • Mark Billings
  • Lynne Oats

Abstract

In this article, we examine the design and administration of Excess Profits Duty (EPD), introduced in the UK in 1915. This represented a significant innovation as the country's first comprehensive attempt to tax 'excessive' business profits. EPD was a complex tax which had two objectives: to generate additional revenues to help fund dramatically increased wartime government expenditure and to curb 'profiteering'. Although criticised on numerous grounds, we argue that the tax was surprisingly successful. For all its defects, it generated very substantial revenues, and its design and administration proved flexible and robust in coping with the uncertainties of war.

Suggested Citation

  • Mark Billings & Lynne Oats, 2014. "Innovation and pragmatism in tax design: Excess Profits Duty in the UK during the First World War," Accounting History Review, Taylor & Francis Journals, vol. 24(2-3), pages 83-101, November.
    • Handle: RePEc:taf:acbsfi:v:24:y:2014:i:2-3:p:83-101
    DOI: 10.1080/21552851.2014.963951
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    1. Tomlinson, Jim, 1994. "Government and the Enterprise since 1900," OUP Catalogue, Oxford University Press, number 9780198287490.
    2. Edgar Jones, 1987. "A History of GKN," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-06629-2, December.
    3. Rubin, Gerry, 1987. "War, Law, and Labour: The Munitions Acts, State Regulation, and the Unions 1915-1921," OUP Catalogue, Oxford University Press, number 9780198255383.
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    Cited by:

    1. Walker, Stephen P., 2017. "Accountants and the pursuit of the national interest: A study of role conflict during the First World War," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 47(C), pages 8-25.
    2. Zhang, Chengrui & Li, Zhaohong & Xu, Jiaqian & Luo, Yiyang, 2024. "Accounting information quality, firm ownership and technology innovation: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 93(C).
    3. Céline Azémar & Rodolphe Desbordes & Paolo Melindi‐Ghidi & Jean‐Philippe Nicolaï, 2022. "Winners and losers of the COVID‐19 pandemic: An excess profits tax proposal," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(5), pages 1016-1038, October.
    4. Giuseppe Modarelli, 2021. "Accounting and the budget negotiation process: The case of the Holy Shroud Exposition (1931) during a period of austerity," CONTABILIT? E CULTURA AZIENDALE, FrancoAngeli Editore, vol. 0(2), pages 7-53.

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