The UK Exchequer (formally His Majesty's Exchequer) is part of the machinery of government, defined as 'the legal and accounting entities which support the UK's spending and revenue activities'. The term is used for the accounting processes of central government, and as such it appears in various financial documents (including the latest departmental and agency annual accounts). The Consolidated Fund account at the Bank of England is officially termed 'The Account of His Majesty's Exchequer': it serves as the government's current account, into which is paid the money raised from taxation (and other government revenues), and out of which is issued money for government spending.
Historically the Exchequer (the Court of Exchequer) was an executive body, having the combined characteristics of a government department and a court of law. It was responsible for the collection and the management of taxes and revenues, making payments on behalf of the sovereign and auditing official accounts. Twice a year, at Easter and Michaelmas, those responsible for collecting the king's revenue (sheriffs, bailiffs, escheators and others) were summoned to the Exchequer to deposit the money and account for all that was owed.
The existence of an Exchequer in England was first recorded in 1110. Similar offices were established in Normandy (by 1180), in Scotland around 1200 and in Ireland in 1210.
Alongside its accountancy responsibilities, the Exchequer had a judicial character. Its primary function in this regard was as a court of revenue: concerned with asserting and protecting 'the royal prerogative in matters regarding the King's revenue', as well as enforcing payments and preventing fraud. From an early date, however, the Exchequer developed a broader jurisdiction (and secondary function) as a court of common pleas: 'hearing and determining personal suits and actions at law between subject and subject'. Over time, the principle of equity was admitted into the judicial workings of the Exchequer, which then came to be recognised as a court of equity as well as a court of law. In the Tudor period the judicial work of the Exchequer further expanded: the Court of Augmentations and the Court of First Fruits and Tenths were both merged into the Exchequer, significantly increasing its workload.
The old Exchequer continued in operation until the 1830s, after which its various offices were gradually and progressively abolished (with their functions being transferred to other departments of state or courts of law). The Exchequer as presently constituted dates from the passing of the Exchequer and Audit Departments Act 1866, which remains in force in relation to the accounting processes of HM Government. It is 'one of the oldest surviving institutions of its type in the world'.
Etymology
The Exchequer was named after a table used to perform calculations for taxes and goods in the medieval period. According to the Dialogus de Scaccario (the 'Dialogue concerning the Exchequer', an early medieval work describing the practice of the Exchequer), the table was large, by with a raised edge or "lip" on all sides (of about the height of four fingers to ensure that nothing fell off it), upon which counters were placed representing various values. The name Exchequer referred to the resemblance of the table to a chess board (French: échiquier) as it was covered by a black cloth bearing stripes of about the breadth of a human hand in a chequer-pattern. The spaces represented pounds, shillings and pence.King John of England: Royal Licenses to Export and Import, 1205–1206 Dialogue concerning the Exchequer Internet Medieval Sourcebook publ by Fordham University, New York. Source: Joseph Hunter, ed., Rotuli Selecti, (London: Eyre & Spottiswoode, 1834), pp. 4–5, 11; reprinted in Roy C. Cave & Herbert H. Coulson, A Source Book for Medieval Economic History, (Milwaukee: The Bruce Publishing Co., 1936; reprint ed., New York: Biblo & Tannen, 1965), p.412 It has been suggested that this was necessary because many of those who were responsible for collecting and submitting taxes, were unable to read or write; more straightforwardly, the counting table provided a useful and practical means of calculating, in plain sight, how much was owed and how much had been paid.
Exchequer in England and Wales
Like other offices of state in England, the Exchequer originally formed part of the Curia Regis or King's court. The royal court was the centre of government administration and finance. No distinction was made between the King's money and the public finances. It was also the seat of justice, cases being heard in the Aula Regis (the Great Hall of the king's palace).
In origin, His Majesty's Treasury was a strong box kept in the king's chamber and therefore it was overseen by the king's Chamberlains (who remained in charge even after it had been given a more secure and permanent base in Winchester Castle). The Treasury was, first and foremost, the place where the money was stored. The Exchequer, on the other hand, emerged (in the early 12th century) as a financial office: 'the Curia sitting for financial purposes'. As such, it was, by default, staffed and overseen by the Great Officers of State. By the reign of Henry II, in the mid-12th century, the Exchequer had come to be based in the Palace of Westminster (the monarch's principal royal residence in London), though occasionally (up until 1339) it sat elsewhere. By the time King John came to the throne, the king's treasury had been removed from Winchester to Westminster.
By the end of the 12th century, the Exchequer had begun to separate itself from the Curia Regis and was operating more-or-less independently both as an administrative and as a judicial body. When in session it was termed the King's Court at the Exchequer (). Those involved in its oversight included the aforementioned Chamberlains, the Chief Justiciar (the senior judge and de facto chief minister of the kingdom), the king's Chancellor (who was head of his writing office and custodian of the Great Seal of the Realm) and his Treasurer (a comparatively junior official at this time); the Chancellor and Treasurer were clerics, the Chamberlains were laymen.
The early Exchequer (12th and 13th centuries)
Origins When the Exchequer was established is not known, but the earliest mention appears in a royal writ of 1110 (during the reign of King Henry I), addressed from Roger of Salisbury and Ranulf the Chancellor to the barones de scaccario (Barons of the Exchequer). The oldest surviving Pipe Roll dates from 1130 and is already in mature form (indicating that such records existed for some time beforehand, although they do not survive).Chrimes Administrative History pp. 62–63 The Pipe Rolls form a mostly continuous record of royal revenues and taxation (though not all revenue went into the Exchequer, so some taxes and levies were never recorded in the Pipe Rolls). A document known as the () provides a detailed description of the Exchequer and its workings in the reign of Henry II; it is believed to date from the late 1170s.
According to the Dialogue, the Exchequer is "said to have begun with the very conquest of the kingdom made by king William, the arrangement being taken [...] from the exchequer across the seas" (i.e. the Exchequer of Normandy); albeit "they differ in very many and almost the most important points". Some scholars, including Thomas Madox (in his 1769 History of the Exchequer), have accepted the likelihood of this proposition; others, such as 19th-century constitutional historian William Stubbs, have dissented from it. Either way, there are no extant records of the Exchequer of Normandy from before 1180.
The Exchequer's modus operandi came to be referred to, with reverence, as the Course of the Exchequer: appeal was frequently (and often selectively) made to the 'ancient Course' by officers of the Exchequer in order to justify claims of precedence and particular ways of working.
Constitution The Dialogue concerning the Exchequer describes the Exchequer as split into two components, which it terms the 'upper Exchequer' and the 'lower Exchequer'.Dialogue concerning the Exchequer The upper Exchequer (usually referred to simply as 'the Exchequer', formally the Court of His Majesty's Exchequer) functioned as a Court of Audit: those appointed as Barons of the Exchequer would sit at the counting table (with its distinctive chequered cloth) where, one by one, the sheriffs of the kingdom (and others with responsibility for Crown revenues) would present themselves to account for monies (rents and other income) which they had received on behalf of the King. The lower Exchequer (known as the Exchequer of Receipt, formally the Court of the Receipt of His Majesty's Exchequer) was where these monies were deposited (and wooden tally sticks issued as a receipt for each deposit). The two were inextricably connected: 'whatever is declared payable at the greater [upper] one is here [at the lower] paid; and whatever has been paid here is accounted for there'.
The 12th-century Exchequer normally sat twice a year: at Easter and Michaelmas. The Exchequer year ended on 29 September (the feast of Michaelmas); thus at Michaelmas (at the "Scaccarium S. Michaelis") the sheriffs were required to present their final account for the year, while at Easter (the "Scaccarium Paschæ") they were required to present an interim account. The Exchequer of Receipt at this time only operated while the Exchequer itself was in session; afterwards the chests of money were taken and deposited in the Treasury at Winchester.
Originally, the Exchequer's jurisdiction covered only such matters as were associated with the king's revenue; however, owing to the Barons' experience in weighing evidence and passing judgements, the king began to look to the Exchequer to settle disputes between his subjects (particularly those concerning property and possessions).
At that time, the only courts sitting at Westminster were the Exchequer and the Curia Regis itself. During the reign of King John, what would become the Court of Common Pleas began to emerge, its explicit purpose being to hold pleas of 'all civil causes at Common Law between subject and subject in actions real personal and mixed'; nevertheless, the emergence of this new court did not prevent civil pleas still being heard in the Exchequer. While the chief purpose of the latter was always "to decide on all matters affecting the rights and revenues of the crown" (indeed "in all cases where the sovereign's revenue is affected the Exchequer is the only court where the question can be tried"), the 'Plea side' ('hearing and determining personal suits and actions of law between subject and subject') continued operate, alongside the 'Revenue side', right up until the court's demise in the late-19th century.
Operation
The operation of the medieval Exchequer, as first described in the Dialogue, is summarised below.
Summonses Under Henry I, the procedure adopted for the audit involved a writ of summons being issued to each sheriff, twice yearly, requiring him to come before the Exchequer with an account of the income in his shire. It included a detailed statement of all amounts due (determined in part by reference to the previous year's Roll). Income to be accounted for usually included the county farm (a fixed sum payable in lieu of income from royal demesne lands), debts carried over from the previous year, amercements levied at the general eyres and forest eyres, taxes such as scutage and tallage, "oblata" (payments made in return for favours) and other miscellaneous items.