Government prepares for the Welsh rates of income tax

The Welsh rates of income tax have been set out in an HMRC guidance note as the department begins consulting on the legislative changes required.

The note states the rates will be charged on the non-savings non-dividend income of those defined as Welsh taxpayers. It will be calculated by reducing by ten pence in the pound the basic higher and additional rates of income tax levied by the UK government and adding new rates proposed by the Welsh government and set by the National Assembly for Wales.

Individuals with more than one place of residence in the UK will be a Welsh taxpayer if their main home is in Wales for longer than in any other part of the union. A new ‘C’ prefix will be added to the tax code as an indicator that the Welsh rates apply.

The note covers other aspects of tax including...