Welsh Tax Codes
As has been previously reported, there are changes to income tax for people living in Wales from April 2019: Some of the tax they pay will be paid directly to the Welsh Government.
Employers will need to be aware as they may start seeing the new Welsh tax codes issued in preparing for the new tax year, and they may have queries from staff as there is more media coverage. The new tax code will have a ‘C’ prefix, eg C1185L
The tax levels will be in line with England and Northern Island until 2021 according to the Welsh Assembly, but then may change. The standard tax band rates are each reduced by 10p in the pound, then that 10p is at the discretion of the Welsh Government.
HMRC will be administering the income tax, sending out the coding notices, and collecting and apportioning the revenue. The income tax will be determined by an employee’s residency, so employees should be encouraged to make sure their records are up to date with HMRC.
What this means in practice is that someone living in Wales with PAYE at the basic rate, for every 20p tax will be paying 10p to UK Treasury and 10p directly to the Welsh Government, but via a single PAYE tax deduction on their payslip. Employer will also continue to pay HMRC via a single payment in the usual way.
For more information see here.