An additional information page, and pertains to UK pressings.

Purchase Tax

Let me tell you how it will be...


Welcome

With reference to the beatlesdna page on this site, I note by the number of results Google now comes up with, that the useful information that I first provided in 2001 regarding this subject is now widely used and quoted, and is recognised as part of the field of record collecting. This is truly a compliment. Thank you one and all ! Of course, the information can also be deemed useful for the likes of Cliff Richard, Connie Francis, Rolling Stones, etc, etc.

This page is to elucidate the originality of the concept, and hopefully not lose your attention span along the way?


The Tax Man Cometh


1939 saw the outbreak of World War Two. One year on, and the British Government could not foretell a conclusion to the conflict.  Someone was going to have to pay for the draining resources, so it was decided to introduce a levy on 'luxury goods", such as jewellery, china and other porcelain ornaments, fur coats, real silk, lace, cosmetics, etc. Phonographic records would also be included. The scheme was termed as a ‘wartime impost’ with the idea that this inflation would dissuade the public from purchasing such, thus the raw materials could be diverted for use in the factories where war related items were being manufactured, and in turn move the labour force to same. One wonders the importance of silk, lace, and cosmetics. Would these be in reserve for the Members Of Parliament in case of capture, so they could put on a jolly good Drag Gang Show?

When the government introduced the proposal of the new Purchase Tax scheme, members of the House Of Commons protested that books and publications were, on the whole, educational, and not a ‘luxury’. Under duress, the then Chancellor of the Exchequer, Sir Kingsley Wood, abolished the idea of taxing books, etc. Being that Sir Kingsley would be saving a considerable sum on his own law books had no influence on this final decision!


House Of Common's Sense

What was deemed as, and as not a luxury, was the bone of contention for many a year to come. In fact, it was to become somewhat farcical rather than a question of doubt. The government set themselves up in an embarrassing scenario by deciding to leverage varying percentages of Purchase Tax, deemed on what they would decide was more important to the good of the country.

Example: 1959. Set aside the ongoing questions in the House on levying Purchase Tax in the first place on gramophone records (more on this later), how about the fact an LP Record Carrying Case, that is one that included covers for the discs and /or Index Cards, carried the same amount of Tax as a record (50%), yet a carrying case of similar design but without the enclosed aforementioned had the rate of 25%. Furthermore, the then trendy freestanding Record Rack also carried a 50% duty, whereas wooden cabinets that housed records had just 5% Tax slapped on them, as were termed as furniture! And we know that all types of furniture are a necessity!

If you find this bizarre, a Wireless (Radio if you prefer) had a combination of two rates of Tax. That is, the 5% being for the cabinet (yes, furniture of course!), and the internal workings at 50% - which was double the rate for electrical instruments, including amplifiers.. err. 

Okay, so Gramophone Records were supposed to be a luxury, but by 1960 there were now a wealth of Spoken Word on the market, including instructional, the works of William Shakespeare, the arts, and the suchlike. Akin to a book, and of great benefit to the short-sighted and blind, you would be forgiven to assume that these were deemed as educational, thus be exempt from Tax. Wrong!  These points were raised in the House on more than one occasion, but the Government dug their heels in. After all, it was for them “a difficult problem”. 

Pop records were bordering on ‘trashy’ by the old lags in the House. The fact that one could decide the outcome of a piece of wood by it’s contents, it would not have been rocket science to come up with a coded numbering system for Records that were of importance in the well-being of the public. Basically, it is the same adage as applies since the conception of taxes. That is, if the people pay without too much resistance, why reduce or abolish?


High Rate - or Irate?

Purchase Tax came into farce force in October 1940, commencing at the rate of 1/3rd (33
1/3%). This was added onto the wholesale price, which, obviously was passed on to the consumer via the retail price. Spookily, the percent amount being the exact same number that was later to be the standard rate of speed set for long-playing records!

In April 1942 the government upped the ante from 33
/1/3% to 662/3% - double! And if that was not bad enough, exactly one year later it shot up to 100%, and did not change again until exactly three years later, 1946, whereupon it reverted to 331/3%, which by contrast, now appeared to be a good deal! Hey, maybe we should all thank the government for the current paltry 20% vat levy?

To make a similar comparison so as to get the gist of this:
..
1943. An HMV 78rpm with a label catalogue index of DA or DR now retailed at 6s 71/2d incl. Tax. Take the ‘average’ weekly wage then as £3. If one earned £3 4s, six records could be purchased, bearing in mind these are effectively 10” singles. Long Playing records (LPs) were not launched onto the market until 1948, although the first release of such in the United Kingdom was 1950.

May 2008. Take an average wage of £265, which, at 40 hours, is above the guaranteed minimum. Divide this by six. Equates to around £44 per record!
..
Yes, it is difficult to compare like-for-like. Just look at those 1960s advertisements for refrigerators and 3-channel b&w reception televisions, do the figures and you would wonder how anybody ever afforded anything at all. But even if you make room for adjustment, it is a wonder how any amount of records was sold during the war. Now, 78rpm discs from this period are on the whole disregarded – and worst of all, discarded!

From the 33
1/3% rate in 1946 as previously mentioned, to the Value Added Tax system introduced in April 1973, there were many more Purchase Tax rate adjustments up and down so as to keep everyone on their toes. This is charted further down this page.


Purchase Tax Codes


At the introduction of the Purchase Tax scheme in October 1940, taxable goods, including records, that had already been manufactured and distributed, would have a sticker adhered by the retailer stating ‘Free Of Purchase Tax’.

From this date, EMI, DECCA, and PHILIPS Record Companies used a Purchase Tax code, commencing with just one letter – ‘T’.

At the factory, if the Mother Stamper had already being manufactured and the tax or price change was imminent,, then an x was to obliterate the old letter, and the revised one underneath this. However, you will find that companies did not always follow through with this rule, thus it can be observed three tax code letters impressed within the run-off, and also sometimes similar embossed around the centre hole. EMI records are a prime example of this! --> Although emails are most welcome, you do not have to make contact regarding this subject, as, to be honest, it is a bit desperate to be collecting variations on this theme! :)

Records held at wholesalers and at the record manufacturers plants would have a sticker adhered to the label, in the form of letter ‘T’. This would also be the code initiated on records manufactured as from December 1940. The letter was located adjacent to spindle’s hole, and embossed on the shellac so that it protrudes through the paper label. This embossed letter was termed at the factory as a ‘slug’ (aficionados have just learned something new!). The utilized tax code letter was also stamped within the needle’s run-off area, If you own records on the Brunswick, Decca and Rex labels from this period, one should be able to observe the printed word ‘Tax’. 
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Should five per cent appear too small,, be thankful they don’t take it all.

-
The record companies allocated retailers an amount of records that could be returned if so desired. However, this, in many cases, could be as low as 5% of the order. But there arose the problem as to the rate of Purchase Tax on any disc returning. After all, what shopkeeper would want to knowingly make a profit on the government’s tax?? If a record had been ordered at the 33
1/3% tax rate, and now the levy was 50%, what to do? How could one keep track? - (pun intended).

Each time the government changed the rate of tax, either up or down, a new letter was utilized, but always retaining the initial ‘T’. As previously set out, every time this occurred, the existing stocks had to be re-coded using the applicable lettered self-adhesive stamp


If you can't lick 'em, beat the system?

Record wholesalers and retailers were given the applicable new coded stamp. The rule was that this had to be adhered onto the label, preferably top right, but in now way obscuring any copyright on the label. Thus, one could now distinguish the stock’s Purchase Tax rate – assuming the stamps had been applied! Yes, there are EPs and LPs to be found with these stamps adhered to their covers, and not the labels, but this was not the correct procedure, and technically these were not eligible as ‘returns’. If the wholesaler had the arduous task of updating the Tax Code on large quantities, life was a lot easier to slap them onto the record's jacket! Some retailers did receive the loose Stamps, but this was actually 'Illegal', as the temptation would be at hand to apply these or not, depending on the direction of the Purchase Tax adjustment, thus make a 'extra profit' on sales plus any returns! 

Consequently, all two letter self-adhesive stamps from 1942 onwards pertain to Purchase Tax, and are not to be confused with 'Royalty' stamps. These can be found on records issued between 1912 and 1940 in the UK (other countries may vary slightly), and signify that Mechanical Copyright and Music Publishing Royalties have been paid. From 1940 onwards, all necessary copyright statements were included within the label's typeface. Oh, and the bland square stamps adhered to record labels with just a number on them - these are the original owner's reference number. The stickers, along with a filing card, were included with a record case or similar.

Quite some time ago I made the comment that record collecting had become similar to stamp collecting, in so much that seeking out imperfections, 'abnormalities', misprints, etc, was comparable to such. Possibly? Well, from the information, observations, and the enclosed table below, record collecting can be if one so chooses to include stamp collecting! But hang on - this could be not so easy as you think.....

...Imagine you are a record shop retailer being informed that the Purchase Tax and or the wholesale price is being adjusted and that you will be given the appropriate stamps for adhesion. Okay, what would you do when receiving them? Adhere them to the records in stock? Remember their purpose? Exactly, for returns, and nothing at all to do with any that are sold. So in principal the only records that would require stamps are the returns. Ah, but then what about the next time there is a change in the rate? Yes, but if the Tax is to be increased again, one could await the next delivery of stamps with the new code and use them on the previously acquired stock, thus making a little bit extra on returns! --> Tax Stamps were for returns; how many Tax Code stamps have you ever found? Exactly. They are few and far between. Thus, to accumulate just one of each example might take you a little time!

--The following data details the complete history of Purchase Tax Coding
 

Applies in general to EMI labels ( Columbia, HMV, MGM, Parlophone, etc.);
Decca labels (Coral, London, RCA, etc); Philips, and Polydor.

Thus, using this table, one can date the actual pressing of records
that were manufactured from 1939 through to 1963. This logic
overrules quoting matrix numbers, as there are no accounts
kept from source as to how many were pressed of what!

If there is no tax code slug (embossing) adjacent to the spindle hole,
using spectacles or a magnifying glass, check within the run-off area,
in particular at 12 o'clock; this is in relation to the matrix being at 6 o'clock.
-

DATE REASON WHOLESALE % TAX CODE COLOUR OF SELF-ADHESIVE STAMP
Oct 21st 1940
-
Stock already held at record shops
=
n/a
-
n/a.
-
white / black print states
 '
FREE OF PURCHASE TAX'
Oct 21st 1940 Commencement of Purchase Tax 331/3 T light blue / black print
Jan 1st 1942 Price increase 331/3 T light blue / black print
Apr 15th 1942 Purchase Tax increased 662/3 DT white / black print
Apr 13th 1943 Purchase Tax increased 100 ouch TT white / dark blue print
Apr 10th 1946 Purchase Tax reduced 331/3 ST dark green / white lettering
Nov 13th 1947 Purchase Tax increased 50 LT orange / white lettering
Apr 9th 1948 Purchase Tax increased 662/3 DT mauve / white lettering
Dec 30th 1950 Price increase 662/3 AT red / white lettering
Apr 15th 1953 Purchase Tax reduced 50 NT white / red print
Oct 27th 1955 Purchase Tax increased 60 RT dark green / white lettering
Oct 31st 1955 Price increase 60 RT dark green / white lettering
Aug 27th 1956  Price reduction ( EMI's 45rpm ) 60 RT dark green / white lettering
June 1st 1957  Price increase 60 XT blue / white lettering
Oct 1st 1958 Price reduction (EMI's 7ER series) 60 UT green / white lettering
Apr 8th 1959 Purchase Tax reduced 50 ET purple / white lettering
Aug 1st 1960
-
Price changes ( EMI's POP B 45; POP 7ER;
                                            7EG; RES; GES )

50

WT

brown / white lettering
July 26th 1961 Purchase Tax increased + Price alterations 55 OT red / white lettering
Apr 10th 1962 Purchase Tax reduced + Price alterations 45 ZT dark grey / white lettering
Nov 26th 1962 Price alterations ( EMI's 45 POP; 7FX ) 45 PT green / white lettering
Jan 1st 1963 Purchase Tax reduced 25 MT pale blue / white lettering
July 1st 1963 Price alterations 25 KT pink / white lettering
July 21st 1966 Purchase Tax increased 271/2 KT n/a
Mar 20th 1968 Purchase Tax increased 50 KT n/a
Nov 23rd 1968 Purchase Tax increased 55 JT n/a
July 20th 1971 Purchase Tax reduced 45 -- --
Mar 21st 1972 Purchase Tax reduced 25 -- --
Apr 1st 1973 VAT scheme commences at the rate of 10% -- -- --

-
Footnotes for above chart
Plus 'extras'
-

DT was employed twice. As there was a six year gap between the two, one should give the
benefit of doubt this was not a clerical error? However, on the second time around, the
self-adhesive stamp included the year date, the only Tax stamp issued to have this criteria.

? I have Decca issue discs (Muffin The |Mule!) pressed in 1948 and 1949 that have CT on the labels

I?  have Columbia issue of 5 discs pertaining to 'South Pacific' from 1946, with each having DTP !

With the exception of July 26th 1961 and Aril 10th 1962, where there was a (retail) price
increase or reduction, the Purchase Tax remained as before. However, studying the chart, it is
somewhat baffling why in some instances a new letter was introduced, and on other occasions unchanged.

During some parts of the 1940's and 1950's, Decca employed a slightly variable lettering scheme.

In the case of Decca, 1960s pressings had the Tax code printed on the label (i.e. no slugs).
However, double-check the run-off for coding. An example being that M/T printed on the
label, but is possibly superseded with KT

CBS label commenced 1961, but no pressing plant until 1964, when they acquired Oriole's stock-in-trade. Thus,
prior to this, vinyl pressings contracted out. Early CBS labels with a purchase tax slug  is a Polydor pressing.

Although apparently not officially documented, it should be noted that the letter J was employed for a short
period following the end of the ‘K’ duration.  It is also possible to find ‘JKT’ slugs on some of EMI’s
November/ December 1968 issues, a few 1969 pressings, and very few 1970.
To reiterate, this can also be observed on Decca's labels as printed.

'THE BEATLES' White Album was released on the 22nd of November. Initial pressings included the KT slug.
but for some strange reason, usually on one disc only. Much scarcer is the inclusion of J   -  here is KTJ

Records manufactured for 'Export' (i.e. pressed in England but not
intended for sale within the United Kingdom) did not require a Tax Code. 
Thus, in this instance, it is of interest to find examples that include this.

More so is to own any UK Export issues that have  the label's contradictory statement
      "
SOLD IN THE U.K. SUBJECT TO RESALE PRICE CONDITIONS SEE PRICE LISTS"!

Whilst 1 G / 1 G are EMI's initial Mother Stampers, during what appears to be the 1963 ~ 1967
period when 'Demonstration Only' singles were being manufactured, some of these' first pressed' discs were
actually coded JR (no number).  Interestingly, this can also be found on standard commercial stock issues,
in particular where the disc received  virtually no attention, thus poor sales ensued.  This data corroborates
that records falling into this category probably were expected not to sell well, and only the initial 300 - 500
or so that were pressed would be suffice.

Finally, for now anyway, all information**,  observations, and opinions set out here are
devised by yours truly. Any copying and pasting, mimicking, etc, to be acknowledged.

** exception being (most of) the table of coding, which is courtesy of (a now previous) employee of E.M.I.

American Excise Tax Report @ August 1964


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