Background to the report

The Wales Act 2014 amended the Government of Wales Act 2006 to give the Welsh Parliament the power to set the 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.

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HM Revenue & Customs (HMRC) is responsible for the administration of the Welsh rates of income tax and continues to collect Welsh income tax as part of the UK tax system. HMRC will pay revenues collected in relation to the Welsh rates of income tax to HM Treasury in the same way as it does for all other tax receipts. HM Treasury is responsible for the payment of the Welsh income tax collected to the Welsh Government.

Content and scope of the report

The NAO has statutory responsibilities for auditing HMRC’s collection of Welsh income tax. This is the third report prepared under these responsibilities and covers:

  • HMRC’s estimate of the 2019-20 income tax revenue attributable to Wales and our view on the methodology used (Part One);
  • key controls operated by HMRC in the assessment and collection of income tax (Part Two);
  • HMRC’s approach to assessing and mitigating the risk of non-compliance with Welsh tax requirements (Part Two); and
  • The cost of administering Welsh income tax – we provide assurance on whether the amounts are accurate and fair in the context of the costs incurred by HMRC (Part Three).


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