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Rebecca Evans MS, Minister for Finance and Local Government

First published:
12 December 2022
Last updated:

Devolved and partially devolved Welsh taxes support the spending priorities as set out in the draft Budget I have published today. Our tax policies also provide an opportunity to deliver the Government’s wider policy priorities in pursuit of a stronger, fairer, greener Wales.

This statement sets out my tax plans included within the draft Budget.

Welsh Rates of Income Tax

The process for Wales involves the UK Government reducing each of the three income tax rates for Welsh taxpayers by 10p. The Welsh Government then decides whether to set the Welsh rates at 10p, thereby retaining parity between Welsh and English taxpayers or to set different rates. In line with its commitment not to take more in Welsh Rates of Income Tax from Welsh families for at least as long as the economic impact of COVID 19 lasts, the Welsh Government proposes to set Welsh Rates of Income Tax for 2023-24 at 10p for the three income tax rates (basic, higher and additional).

Alongside this draft Budget, I am publishing an updated Ready Reckoner for the Welsh Rates of Income Tax. This provides estimates of the potential revenue impact from changes to each of the three Welsh Rates. 

Landfill Disposals Tax

From 1 April 2023, I intend to raise Landfill Disposals Tax rates in line with RPI forecast inflation (as forecast by the Office for Budget Responsibility in Autumn 2021). This is consistent with the UK landfill tax rates for 2023-24, to support the policy objective of reducing waste disposed of at landfill, and to help meet our goal of becoming a zero waste nation.

By setting rates for 2023-24 that are consistent with UK landfill tax, public services in Wales will continue to benefit from the tax revenue, while ensuring the risk of the movement of waste across borders is reduced.

The Regulations required to put effect to these changes are being laid in the Senedd on 15 December 2022.

The changes to the rates from 1 April 2023 are set out in Annex 1.

Land Transaction Tax

Changes to Land Transaction Tax rates which were being developed for introduction alongside the Draft Budget were brought forward to take effect from 10 October 2022. This was to avoid any uncertainty in light of the UK Government changes to Stamp Duty Land Tax rates on 27 September. No further changes are proposed in this Draft Budget.

The changes which came into effect from 10 October affect the residential main rates. For the residential main rates, the starting threshold was raised from £180,000 to £225,000. The first tax rate is now set at 6% and applies to the portion of the price between £225,000 and £400,000. No changes were made to other rates, including the higher residential rates.

Tax Policy Report

Alongside publication of the Draft Budget, I have published the second annual

Tax Policy Report against the Work Plan for 2021-26. The Report sets out progress on the range of activities in which we are engaged, taking forward our tax related Programme for Government commitments including in the areas of local government finance reform, and a consultation on legislation permitting local authorities to raise a visitor levy.