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New Welsh rates of income tax explained

March 19, 2019 at 12:56 PM

From April 2019, income tax will be partially devolved – and if you live in Wales you will pay Welsh rates of income tax. 

  • This means a proportion of your income tax will be paid directly to the Welsh Government to fund public services in Wales.
  • It will affect 1.3 million taxpayers living in Wales will pay Welsh rates of income tax from 6 April 2019 and have a 'C' as part of their tax code.
  • Read more here: Income Tax in Wales
  • More information: Welsh Government rates of income tax

The Welsh Government will not raise Welsh rates of income tax in 2019. This in line with the commitment set out in the Welsh Labour manifesto. 

This is a change from the current system, where all income tax is currently paid to the UK Government to fund spending across the UK. There will be no change to the way income tax is collected – HMRC will continue to collect income tax as a single payment.

Keeping tax rates paid by Welsh taxpayers unchanged by setting a 10p rate in each band is forecast to raise over £2 billion for the Welsh Government to spend on public services in 2019-20.

Together with the block grant, Welsh taxes will fund the vital public services that many in society depend on.

These taxes will form revenue streams totalling around £5bn in 2019–20: 

  • Welsh Rates of Income Tax;
  • Land Transaction Tax;
  • Landfill Disposals Tax;
  • Nondomestic Rates and
  • Council Tax. 

The majority of funding for Wales will continue to come from the UK Government, through the block grant.

  • This has fallen by 5% in real terms as a result of the UK Government's ongoing policy of austerity. This means there is £850m less to spend on public services in 2019-20 than there was in 2010–11.