The National Audit Office (NAO) has today published a report on HM Revenue and Customs’ (HMRC’s) progress towards implementing the Welsh rates of income tax, effective from 6 April 2019.
Under the Wales Act 2014 the National Assembly for Wales (the Assembly) has the power to set a Welsh rates of income tax that will apply to the non-savings non-dividend income of Welsh taxpayers from the 2019-20 tax year onwards.
From April 2019, the UK basic, higher and additional income tax rates in Wales will be reduced by 10 percentage points and the Assembly will use its powers to determine the Welsh rates that will replace them. The sum of the reduced UK rates and the new Welsh rates will determine the overall rate of tax paid by Welsh taxpayers. For 2019-20 the Welsh Government has proposed rates equal to the reduction in the UK rates, 10 percentage points.
This report is the first prepared by the Comptroller and Auditor General (C&AG) to the Welsh Assembly under the Wales Act 2014. This requires the C&AG to prepare a report on the adequacy of any of HMRC’s rules and procedures put in place, whether these rules and procedures are being complied with, the correctness of the sums brought to account by HMRC and the accuracy and fairness of the amounts reimbursed to HMRC.