2021-2022 Welsh Rate of Income Tax (WRIT) – No change

The Welsh Government draft budget has proposed a no change basis for Income Tax for the 2021/2022 tax year – Wales stays in alignment with England and Northern Ireland (sometime referee for Income Tax purposes as the rest of the UK or rUK.

The following is extracted from the Welsh Government draft budget document at section 3.06 & 3.07

Welsh Rates of Income Tax (WRIT)

WRIT was introduced on 6 April 2019. Income tax is partially devolved to Wales, which means that while the Welsh Government is able to vary the three income tax rates (basic, higher and additional) for Welsh taxpayers, all other aspects of the tax remain the responsibility of the UK Government, and HMRC continues to administer income tax in Wales.

The process for Wales involves the UK Government reducing each of the three income tax rates for Welsh taxpayers by 10p, and making a corresponding reduction to the Welsh block grant, which funds devolved public services in Wales. The Welsh Government then decides whether to set the Welsh rates at 10p, thereby reinstating the funding for services (and retaining parity between Welsh and English taxpayers) or to set different rates.

PAYadvice.UK 22/12/2020 updated 20/2/2021

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