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Income Tax

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From 6 April 2019, some of the Income Tax paid by people living in Wales will directly fund Welsh public services.

If you live in Wales, HMRC will continue to collect your Income Tax as usual.  However, for the first time, a proportion of that Income Tax will be transferred straight to the Welsh Government. It will be spent on public services in Wales. 

This is a change from the current system, where all income tax from Wales is paid to the UK government to fund spending across the UK.

The process for setting Welsh rates of income tax

From April 2019, the UK government will reduce each of the 3 rates of income tax – basic, higher and additional rate – paid by Welsh taxpayers by 10p. Each year, the Welsh Government will then decide the 3 Welsh rates of income tax, which will be added to the reduced UK rates. The combination of reduced UK rates plus the Welsh rates will determine the overall rate of income tax paid by Welsh taxpayers.

The Welsh Government proposes to set the first Welsh rates of income tax at 10p: this means the rates of income tax paid by Welsh taxpayers will continue to be the same as those paid by English and Northern Irish taxpayers.

The National Assembly will need to confirm this proposal through a motion prior to the final Budget.