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Rebecca Evans MS, Minister for Finance and Local Government

First published:
24 October 2022
Last updated:

The Welsh Tax Acts etc. (Power to Modify) Bill was passed by the Senedd on 12 July 2022 and received Royal Assent on 8 September.

Tax devolution is important. It provides a significant lever through which we are better able to deliver strategic priorities for Welsh citizens and businesses.

The last four years’ experience of tax devolution has enabled the Welsh Government to develop considerable tax capability. We have established a distinct Welsh approach to shaping tax policy, and to the delivery of that policy by the Welsh Revenue Authority. Our approach keeps the needs of Welsh citizens, communities, and businesses at the forefront.


This Act will provide an additional fiscal lever by permitting the Welsh Ministers to make amendments in response to changes made by the UK government to predecessor UK taxes - that is, to stamp duty land tax and landfill tax - which will affect the Welsh block grant adjustment, and therefore the revenues available for essential public services.

Amendments to the Welsh Tax Acts will also be permitted in order to respond to other external circumstances, such as to ensure the devolved Welsh taxes are not imposed where to do so would be incompatible with any international obligations.

It will also enable the Welsh Ministers to make legislative changes to protect against avoidance activity, which can then be stopped with immediate effect. This includes situations where increased clarity in the legislation will put beyond doubt the intended application of the legislative provisions, and potentially benefit taxpayers by stopping the promotion of avoidance opportunities that do not actually exist. Such action has been taken by the UK government to protect tax regimes and taxpayers in the past and the Welsh Ministers will now be able to take similar action.

Lastly, this Act will allow the Welsh Ministers to make changes where a court or tribunal decision identifies an issue that the Welsh Ministers consider could benefit from legislative change, or greater clarification of the law. This includes decisions relating to the Welsh Tax Acts, UK predecessor taxes, other taxes, or other laws that may affect the devolved taxes.

Retrospective effect

This Act allows the Welsh Ministers to make regulations which may have retrospective effect. The use of the power retrospectively will be considered on a case-by-case basis as justification for each use may differ, depending upon the purpose.

This will include situations where the impact of the regulations is to confer a benefit to Welsh taxpayers. For example, the Welsh Government may want Welsh taxpayers to benefit from a reduction in their tax liability from the same date that a change was introduced in England. The Welsh Ministers may choose to achieve that by adopting, or adapting, the same or a different policy

Statement of policy on retrospective legislation

The Welsh Ministers have a statutory obligation to publish a statement on their policy with respect to the exercise of the power to make regulations with retrospective effect. That statement is annexed to this Written Statement. The Welsh Ministers are required to publish the statement of policy within 3 months of the Act receiving Royal Assent. This Written Statement meets both those statutory obligations.

Review, alternative mechanisms and cessation of the power

The Welsh Ministers must review the operation of the Act and publish their conclusions within four years of the Act coming into force. That review will include an assessment by the Welsh Ministers of alternative legislative mechanisms for making changes to the Welsh Tax Acts and regulations made under any of those Acts. My officials will start exploring alternative mechanisms in the near future. That work will include engagement with tax and legal experts and I hope that they will again be willing to give their time generously in helping to develop the Welsh devolved tax framework.

The Welsh Ministers ability to make regulations using the power in this Act is limited to five years from the day the Act comes into force. That period can be extended to no later than 30 April 2031 subject to Senedd approval.

The Welsh Tax Acts etc. (Power to Modify) Act 2022: Statement of policy