Background to the report

The Wales Act 2014 amended the Government of Wales Act 2006 to give the National Assembly for Wales (the Assembly) 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. The NAO has statutory responsibilities for auditing HMRC’s collection of Welsh income tax.

Content and scope of the report

This is the second report prepared under these responsibilities and covers HMRC’s preparations leading to the roll-out of the Welsh rates from April 2019. It provides:

  • an overview of HMRC’s approach to the administration of devolved income taxes and the Welsh rates in the context of the UK tax system (Part One);
  • our findings from reviewing the implementation of the Welsh rates of income tax, including key events and timings (Part Two); and
  • details of the cost of administering Welsh income tax, including whether the amounts are accurate and fair (Part Three).

This report does not consider the correctness of sums brought to account in relation to the Welsh rates of income tax, the adequacy of the rules and procedures put in place by HMRC or whether these rules and procedures have been complied with. These will be covered in our 2019-20 report on the Welsh rates of income tax.


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