(Title Image: HMRC via Twitter)

Finance Committee

Implementation of Fiscal Devolution: 2019 Update (pdf)

Published: 27th March 2019

“The introduction of the Welsh Rates of Income Tax represents a significant increase in the portion of taxes paid by Welsh taxpayers which are decided in Wales. “But we are concerned by the evidence, including constituency feedback and the Committee’s own indicative poll, which suggested a disappointingly high proportion of the population were as-yet unaware of the impending implementation of Welsh rates of income tax.”

– Committee Chair, Llyr Gruffydd AM (Plaid, North Wales)

From this Saturday (6th April), a proportion of income tax will be raised and decided in Wales, which is estimated will make up around £2billion of Wales’ ~£16billion devolved budget. In the 2019-20 Welsh budget, the rate of Welsh income tax will remain unchanged at 10% for all income tax bands.

1. The Welsh Revenue Authority is running smoothly, but AMs were frustrated by the lack of engagement by the Welsh Secretary

The cost of establishing the Welsh Revenue Authority – the body responsible for devolved tax policy – has fallen within the estimated budgets. They also haven’t had any problems in recruiting qualified staff – though they mention problems in retaining seconded staff for the medium-term.

The implementation of landfill disposals tax and land transaction tax (the replacement for stamp duty) also seems to have happened without any problems.

The person who oversaw the introduction of fiscal devolution – the Welsh Secretary, Alun Cairns MP – has refused to give evidence to the Committee and would only do so on an individual AM-by-AM basis, something the Committee describes as “particularly frustrating”.

2. 31% of the Welsh population are unaware of Welsh income tax

According to a Welsh Government-commissioned survey in June 2018, just 24% of people in Wales were aware of the forthcoming Welsh Rate of Income Tax. This was before notification letters were sent out (in November 2018).

Following this awareness work, the Committee undertook their own surveys on social media which found that the awareness levels had increased to 69%, though this still meant 31% didn’t know. It’s worth pointing out the sample size was pretty small at 356 people.