Background to the report
The NAO has statutory responsibilities for auditing HMRC’s collection of Welsh income tax.
Jump to downloadsThe Wales Act 2014 gave the Senedd (Welsh Parliament) power to determine the rates (excluding the personal allowance) paid by Welsh taxpayers on all non-savings, non-dividend income, from 6 April 2017.
Since April 2019, the UK government has reduced the UK basic, higher and additional income tax rates by 10 percentage points for Welsh taxpayers, and the Senedd has had the power to apply Welsh rates in addition. For each tax band, the rate of income tax paid is the sum of the reduced UK rate and the Welsh rate set for the year.
As in previous years, for 2023-24 the Senedd set the Welsh rates of income tax at 10% across all bands, which meant that the total rates for taxpayers in Wales matched the UK rates at 20% (basic rate), 40% (higher rate) and 45% (additional rate).
In this report, we describe the amount collected under the Welsh rates of income tax, which represents approximately 43% of the total income tax collected from Welsh taxpayers. The Welsh Government’s resource block grant from the UK government is reduced by this amount and HM Treasury is responsible for paying these amounts to the Welsh Government. The balance of remaining income tax contributions is paid to the UK Government.
HMRC has calculated that there were 1.5 million Welsh taxpayers in 2022-23 (2021-22: 1.4 million).
Scope of the report
This report assesses:
- HMRC’s calculation of the 2022-23 Welsh rates of income tax revenue (the ‘outturn’) and assurance on the correctness of amounts brought to account
- HMRC’s estimate of the 2023-24 Welsh rates of income tax revenue and our view on the estimate methodology
- key controls operated by HMRC to assess and collect income tax
- HMRC’s approach to assessing and mitigating the risk of non-compliance with Welsh tax requirements
- the cost of administering Welsh income tax. We provide assurance on the accuracy and fairness of these amounts in the context of costs incurred by HMRC
Downloads
- Report - Administration of Welsh income tax 2023-24 (.pdf — 365 KB)
- Summary - Administration of Welsh income tax 2023-24 (.pdf — 108 KB)
- ePub - Administration of Welsh income tax 2023-24 (.epub — 905 KB)
- Adroddiad - Gweinyddu cyfraddau treth incwm Cymru 2023-24 (.pdf — 290 KB)
- Crynodeb - Gweinyddu cyfraddau treth incwm Cymru 2023-24 (.pdf — 105 KB)
- ePub - Gweinyddu cyfraddau treth incwm Cymru 2023-24 (.epub — 970 KB)
Publication details
- ISBN: 978-1-78604-591-1 [Buy a hard copy of this report]
- HC: 542, 2024-25
