Welsh Rates of Income Tax

From April 2019 the Welsh Government will be able to vary the rates of income tax paid by taxpayers who live in Wales (Welsh taxpayers).

The UK government will reduce each of the three rates of income tax – basic, higher and additional rate paid by Welsh taxpayers – by 10p. The Welsh Government will then decide the three Welsh Rates of Income Tax, which will be added to the reduced UK rates. The combination of reduced UK rates plus the Welsh rates will determine the overall rate of income tax paid by Welsh taxpayers. Revenue from the Welsh Rates of Income Tax will go to the Welsh Government.

Welsh Taxpayers will have the letter ‘C’ (Cymru) as a prefix to their tax code.

For the year 2019-20 the Welsh Government has decided to set Welsh Rates of income tax at the the same level as those in England and Northern Ireland


New ‘C’ Tax Codes

Employers with employees that HMRC has identified as Welsh residents will be issued with with notices of coding to change the tax code of such employees. The new codes begin with the letter ‘C’. Moneysoft Payroll Manager has been updated in order to allow the use of the new ‘C’ tax codes – e.g. C1250L for pay periods from April 2019. You should only change an employees tax code if instructed to do so by HMRC.

Please also refer to the following guide on Changing an employee’s Tax Code within Payroll Manager if you have been instructed by HMRC to change the tax code for an employee.

Welsh Rates of income tax FAQS

Welsh Taxpayer Technical Guidance

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