The new Welsh rates of income tax
6 April 2019 sees the introduction of the new Welsh Rates of Income Tax (WRIT), which will be payable by individuals whose main residence is in Wales.
Currently, all income tax from Wales is paid to the UK government. From 6 April 2019, a proportion of that income tax will be paid directly to the Welsh government. The UK government will reduce the basic, higher and additional rates of income tax by 10p for Welsh taxpayers, and the Welsh government will set the three WRIT. These will then be added to the UK rates.
The Welsh Assembly has agreed the government’s proposal to set the first WRIT at 10p, meaning that for 2019/20 Welsh taxpayers will pay the same income tax as those in England and Northern Ireland.
Income tax will continue to be collected via PAYE and self assessment. However, Welsh taxpayers will have a new ‘C’ prefix added to their tax code.
The personal allowance and tax rates on dividends and savings income will continue to be set by the UK government for all UK taxpayers, regardless of where they live in the UK.
Taxpayers are being advised to ensure that they keep HMRC informed of any change of address.