On 04 March 2025, the Senedd (Welsh Parliament) agreed to Motion NDM8833 which sets the Welsh Rates of Income Tax (WRIT) to come into force for Welsh Taxpayers for tax year 2025/26.
The WRIT powers mean the Welsh Government can vary the rates in the UK (the 20% Basic, 40% Higher and 45% Additional) by + / - 10 percentage points. This is done by taking the UK rates, reducing them by 10 percentage points and then adding back on the WRIT rates.
The Welsh Government have never used the powers to vary the rates of Income Tax payable when compared to rest of the UK Taxpayers and their draft Budget on 10 December 2024 for tax year 2025/26 indicated they will remain at 10 percentage points. The agreed Motion, known as the Welsh Rate Resolution, means that the following applies to Welsh Taxpayers in tax year 2025/26:
|
Band
|
Threshold
|
UK Rate
|
Less
|
Plus WRIT
|
Welsh Rate
|
|
|
|
%
|
%
|
%
|
%
|
|
Basic
|
1 – 37,700
|
20
|
10
|
10
|
20
|
|
Higher
|
37,701 – 125,140
|
40
|
10
|
10
|
40
|
|
Additional
|
Over 125,140
|
45
|
10
|
10
|
45
|
This means there is no change from tax year 2024/25.
For Bookkeepers
Like previous years, no change means stability and this is welcomed. The Welsh rates (10% Basic, 10% Higher and 10% Additional) must be set by the Welsh Rate Resolution before the start of the next tax year and the rates remain in place for the whole tax year.
