While ordinary revenue was an annual feature for Henry VII, extraordinary revenue was not. Extraordinary revenue came to the crown only on specific occasions and for very particular reasons. Extraordinary revenue was made up of parliamentary grants, loans and benevolences, clerical taxes, feudal obligations and the French pension.
Parliamentary grants presented potential problems for a king. If a king required a grant, to some it would be almost an admission that he was weak. This is something Henry VII did not want to appear especially at the start of his reign when he was very vulnerable. Henry was also aware that a parliamentary grant was usually raised in the form of a tax and that this ultimately fell on the people of the kingdom. Taxation was not popular as those who were least able to afford it were required to pay it. Henry was also aware that Parliament could make demands on the king in exchange for a grant. Whatever angle a parliamentary grant was looked at, it left the king potentially vulnerable. However, such was Henry’s vulnerable position that he asked Parliament for a grant in 1487 to finance the Battle of Stoke, in 1489 to pay for a war against the French and in 1496 to defend himself against the Warbeck Rebellion. Though the latter never fully materialised, the money that was granted was also used to put down the Cornish Rebellion. A Parliamentary grant was invariably a tax based on a person’s ‘moveable goods’. However, records for this were many years out of date and any tax introduced in the reign of Henry VII did not approach the available wealth in the country. In 1489, Henry tried to introduce a form of income tax to raise the £100,000 needed to finance a war against the French. Such was the complexity behind collecting the tax – and the resistance to paying it – that only about £30,000 was ever collected. An efficient and effective system of tax collection was many years in the future.
Henry could also rely on loans from his more wealthy nobles. In 1496, Henry had to supplement the grant from Parliament with loans from his subjects. The evidence from records from the time suggests that the loans were usually small and always repaid. In fact the king had little choice but to repay the loans as the last thing he needed were resentful nobility at a time when there were claimants to the throne. Benevolences were different to a loan in the sense they were a forced loan and they were not paid back! They had been introduced by Edward IV in 1475 when he was preparing for a war with France. Basically, benevolences were an appeal to the patriotic fervour of the people in support of their king. In 1491, Henry appealed for money for a war with France. The appeal raised £48,500 – a much greater sum than direct taxation could hope to raise. The commissioners sent around to collect the money were stringent in doing so. People who failed to pay what was expected of them were threatened with appearing before the Royal Council. A healthy desire to pay any required sum was seen as being a sign of how much a person “cherished the king” (Polydore Vergil). However, it is known that many paid grudgingly and rather than be called ‘benevolence’, many referred to the tax as ‘malevolence’.
Henry also received money from the Church. A parliamentary grant was usually accompanied by a grant from the archbishoprics of Canterbury and York. In 1489, the Church gave £25,000 to the cost of a war with France. Before the time of the Reformation and with a devout king, Henry and the Church had a good relationship even if he did take to selling church positions to raise money. Henry also continued an age-old practice of not immediately appointing a bishop when a bishopric fell empty as he could pocket the money raised in that bishopric while it was vacant. The time limit Henry put on this seems to have been for a maximum of 12 months and by the end of his reign, this process was providing him with £6000 a year.
Henry could also call on feudal obligations for money. As chief feudal lord, Henry could exploit many old ways of gaining money – and Henry was keen to exploit this as much as was possible. He could force anyone with an income of £40 or more a year to become a knight; he could also raise money when he knighted his eldest son or married off his eldest daughter. In 1504 Henry received £30,000 for knighting Prince Arthur and the marriage of Margaret to the King of Scotland. Arthur had been knighted fifteen years earlier and had died in 1502! By 1504 Henry was in a strong enough position to force this through – something he could not have done earlier in his reign.
In 1492, the French granted Henry a pension as part of the Treaty of Étaples. This was nothing more than payment to remove English troops from French soil. Henry received a payment of £159,000 and an annual pension of £5,000.
Henry also received money from bonds and recognisances. A bond was a written contract of good behaviour or for the individual to perform a specific task. If they failed in this, they lost the money associated with their bond. Bonds had been used for many years, primarily as a way of ensuring good service from those in customs and excise. However, Henry extended their use. Recognisances were formal acknowledgements of actual debts and other obligations owed to the Crown. This legal status tied individuals to Henry and they reneged on such debts at their peril. As courts were very much influenced by the Crown, any judicial decisions were almost certainly going to be in Henry’s favour. Recognisances were seen as being so important by Henry VII that none could be issues without his explicit agreement. Immediately after the Battle of Bosworth, the Earl of Northumberland and the Viscount Beaumont of Powicke had to both pay £10,000 as guarantees of loyalty. If a court deemed that they had been disloyal to Henry after this, they would have lost the £10,000. Some merchants paid a bond to delay payment of customs dues. Less ethical, bonds were issued as a pardon for murder or to release a wealthy person from prison. Between 1485 and 1495, 191 bonds were collected. By 1493, they were earning Henry £3,000. By 1505, bonds were worth £35,000 a year.
Henry used bonds and recognisances to keep people in check – especially the nobility. Research by Professor Lander has shown that out of the 62 senior noble families in England in the reign of Henry, 46 were at one time or another financially tied to Henry – 7 were tied by attainder, 36 by bonds/recognisances and three by other means. Rather than being just simply greedy, Henry saw money as a key way to keep the nobility under his control. To him, the more money he had, the more authority he gained over the nobility, some of whom were less than loyal in the early years of his reign.