On 05 March 2024, the Senedd (Welsh Parliament) agreed to Motion NDM8501 which sets the Welsh Rates of Income Tax (WRIT) to come into force for Welsh Taxpayers for tax year 2024/25.
The Motion read as follows:
‘To propose that the Senedd, in accordance with section 116D of the Government of Wales Act 2006, agrees the Welsh rate resolution for the 2024-25 Welsh rates of income tax as follows:
a) the Welsh rate for the purpose of calculating the basic rate of income tax is 10p in the pound
b) the Welsh rate for the purpose of calculating the higher rate of income tax is 10p in the pound, and
c) the Welsh rate for the purpose of calculating the additional rate of income tax is 10p in the pound’
The Welsh Rates of Income Tax (WRIT) are set annually by the Welsh Government and the legislative process allows each of the rUK tax thresholds to be reduced by 10 percentage points with the WRIT percentage added. In 2024/25, reducing by 10 and adding 10 means Welsh Taxpayers pay the same rate of tax as their rUK equivalents:
|
Band
|
rUK Rate
|
Less
|
Plus WRIT
|
Welsh Taxpayer Rate
|
|
|
%
|
%
|
%
|
%
|
|
Basic
|
20
|
10
|
10
|
20
|
|
Higher
|
40
|
10
|
10
|
40
|
|
Additional
|
45
|
10
|
10
|
45
|
This approval is known as setting the Welsh Rate Resolution. This is set on the assumption that the rates of Income Tax, excluding those applying to Scottish Taxpayers are 20%, 40% and 45%. The entire Welsh Budget also assumes that the UK Personal Allowance is £12,570.
As with the Scottish Rate Resolution, herein lies an issue bookkeepers need to be aware of.
For Bookkeepers
If the UK Budget on 06 March 2024 makes any changes to the rates of Income Tax (the 20, 40 and 45) or the value of the Personal Allowance for tax year 2024/25 this may mean the Welsh Budget needs to be revised along with the Income Tax decisions.
