Welsh Income Tax Rates Set Same as England and NI

With effect from 6^th April 2019 the Welsh Assembly has control of income tax rates in Wales.  So called ‘Welsh Income Tax”. 

Income tax on non-savings and non-dividend income e.g. earned income and self-employed income will be calculated by reducing the UK’s standard rates of basic, higher and additional rates tax by 10p in every pound i.e. 10%.  I.e. National tax rates would then be 10%, 30% and 35% respectively + any Welsh tax rates.

This means technically that a Welsh resident ‘higher rate tax payer’ will now pay 30% higher rate income tax to HMRC’s general revenue receipts and the balance on top will be set by the Welsh Assembly will be in the revenue raised also within the control of the Welsh Assembly.

Reality Check:  Last week, the Welsh Assembly set its own rate of income tax at 10% anyway for the tax year 2019-2020, meaning that Welsh resident tax payers will still pay 20%, 40% and 45% for basic, higher and additional income rates respectively in total.

Other savings income and dividend income taxes from Welsh resident taxpayers will still be taxed at the UK rate.

In short, Welsh residents will pay exactly the same income taxes as those in England and Northern Ireland, it is only Scottish rates that will differ.