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 taxpayers4, all other aspects of the tax remain the responsibility of the UK Government, and HMRC continues to administer income tax in Wales.
As part of the Welsh Tax Policy report that coincides with the Welsh Draft Budget 2025 to 2026, Mark Drakeford MS made his proposal to the Welsh Assembly in WRIT for April 2025.
Welsh Rates of Income Tax (WRIT)
WRIT was introduced on 6 April 2019 and is collected and managed by His Majesty’s Revenue and Customs (HMRC).
The process for Wales involves the UK Government reducing each of the three income tax rates for Welsh taxpayers by 10p.
The Welsh Government then decides whether to set the Welsh rates at 10p, thereby retaining parity between Welsh and English taxpayers or to set different rates.
The Welsh Cabinet Secretary for Finance and Welsh Language Finance Mark Drakeford MS has announced there will be no rise in income tax rates.
The Welsh Government intends to set the WRIT for 2025-2026 at 10p, maintaining the current levels. This proposal must be confirmed by the Senedd, through a motion prior to the agreement of the final 2025-26 Budget.
Updates may be applied as more detail is received.
PAYadvice.UK 10/12/2024 updated