Three taxes in Wales are affected:
- Income Tax
- Stamp Duty Land Tax
- Landfill tax
A Welsh language version of this story is also available.
Income Tax
From 6 April 2019, people with a main residence in Wales and who pay Income Tax will pay Welsh rates of Income Tax set by the Welsh Government.
Pay As You Earn (PAYE) customers resident in Wales will receive a new tax code that begins with 'C', including customers whose income is below the tax threshold.
Self-employed customers who file an online tax return will be asked to note their country of residence on their 2019 to 2020 return.
HMRC will continue to collect Income Tax, but the Welsh Government will be able to vary the rate paid by Welsh resident taxpayers. This means that people living in Wales could pay a different rate of Income Tax compared to people in other parts of the UK.
In practice, this will work by reducing the basic, higher and additional rates of income tax by 10 pence. The Welsh rates set by the Welsh Government will then be added to this.
For the tax year 2019 to 2020 the Welsh Government has set the Welsh rates at the same level as in England and Northern Ireland.
Details of the proposed rates were announced in the Welsh Government Budget in October 2018 and ratified in January 2019.
Revenue from the Welsh rates of Income Tax will go to the Welsh Government.
For more information about Income Tax in Wales and the rates for 2019 to 2020 see the Welsh Government website.
There is more general information on Income Tax on GOV.UK.
Land Transaction Tax
On 1 April 2018, Land Transaction Tax (LTT) replaced Stamp Duty Land Tax (SDLT).
LTT is collected by the Welsh Revenue Authority (WRA). The Welsh Government published rates and bands for LTT in October 2017.
HMRC will not accept SDLT returns for land transactions in Wales with an effective date of transaction on or after 1 April 2018.
If you have purchased land or property in Wales since 1 April 2018, ask your conveyancer or solicitor about the arrangements for LTT.
Cross-border transactions
If you are buying land and/or property that fall in more than one tax jurisdiction on or after 1 April 2018, read this guidance to ensure you pay the right tax.
Transitional guidance
You can read the transitional guidance on the WRA website.
Tax calculator
If you need help with assessing the amount of tax you need to pay, you can find a dedicated tax calculator on the WRA website.
Conveyancers and solicitors
If you are a conveyancer or a solicitor representing people buying and leasing property and land in Wales, you need to register on the WRA website before filing a tax return for transactions with an effective date of 1 April 2018 or after.
The WRA is encouraging businesses to sign up at least 10 days before their first transaction that includes LTT.
Landfill Disposals Tax
From 1 April 2018, Landfill Disposals Tax (LDT) replaced landfill tax in Wales. This will be administered by the WRA and payable by landfill operators in Wales.
If you are a landfill site operator in Wales, you can register now for the LDT.
