In the UK, a system of tax collection in
which a proportional amount of income tax is
deducted on a regular basis by the employer
before wages are paid and transferred to the
Inland Revenue, reliefs due being notified to
the employer by a code number for each
employee. In the USA it is called withholding
tax. It was introduced in Britain in 1944 to
spread the tax burden over the year for the
increasing number of wage-earners becoming
liable.