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.

Read the full report

Administration of Welsh Income Tax 2017-18

Notes for editors

  1. The Wales Act 2014 amended the Government of Wales Act 2006.
  2. A Welsh taxpayer is someone with a tax liability whose main place of residence in a given tax year is Wales, or who spends most of that tax year living in Wales. There are a number of specific cases whereby a taxpayer would always be deemed Welsh. HMRC is responsible for determining whether someone is a Welsh taxpayer. Based on the latest Survey of Personal Incomes published in May 2018, HMRC estimates there are 1.35 million Welsh taxpayers in 2017-18.
  3. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
  4. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £741 million in 2017.