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UK and Welsh Governments confirm next steps in Welsh tax devolution

The first Welsh taxes for almost 800 years are ready to be switched on, the UK and Welsh governments confrmed on Friday January 26

From 1 April 2018 stamp duty land tax and landfill tax will be replaced by land transaction tax and landfill disposals tax in Wales.

At a meeting in Cardiff last Friday, the Chief Secretary to the Treasury, Elizabeth Truss, and Welsh Government Finance Secretary, Professor Mark Drakeford, agreed that, following an assessment of the Joint Exchequer Committee (Officials) on 10 January, the Welsh Government, Welsh Revenue Authority and HMRC are ready for the transition to the new devolved taxes.

Professor Drakeford said:

The devolution of these taxes represents a significant milestone for Wales, helping us to make Wales a fairer nation and to grow the Welsh economy.

The meeting was also an opportunity to reflect on the good and constructive relationships which have developed in taking fiscal devolution forward over this period. I look forward to this continuing.

Chief Secretary to the Treasury, Elizabeth Truss, said:

We are committed to giving the National Assembly for Wales more responsibility to raise its own funding. And that is why further income tax powers will follow next year. This will give the Welsh Government greater powers to shape their economy.

The UK Government is also committed to delivering for Wales, as demonstrated by the £1.2 billion boost to the Welsh Government’s funding at Budget. I look forward to continuing our constructive working partnership.

The Welsh Government and the National Assembly for Wales will become responsible for some of the taxes paid in Wales from April 2018.

Three taxes in Wales will be affected:

  • Stamp Duty Land Tax
  • Landfill tax
  • Income tax (from April 2019)

The UK Government legislated for SDLT and Landfill Tax devolution in the Wales Act 2014 and in the Wales Act 2017 legislated to give the Welsh Government powers over Welsh rates of income tax from April 2019.

Advice for taxpayers on the changes

Land transaction tax

From 1 April 2018, land transaction tax (LTT) will replace Stamp Duty Land Tax (SDLT).

LTT will be collected by the Welsh Revenue Authority. The Welsh Government published rates and bands for LTT in December 2017.

HMRC will not accept SDLT returns for land transactions in Wales with an effective date of transaction on or after 1 April 2018.

If you plan to purchase land or property in Wales on or after 1 April 2018, ask your conveyancer or solicitor about the arrangements for LTT.

Landfill disposals tax

From 1 April 2018, landfill disposals tax will replace landfill tax in Wales.

This will be administered by the Welsh Revenue Authority. The tax will be payable by landfill operators in Wales.

For more information on Welsh taxes visit the Welsh Revenue Authority.

Welsh rates of income tax

From 6 April 2019, Welsh rates of income tax will be introduced.

Income tax will continue to be collected by HMRC.

You will not need do anything as long as HMRC has your correct address - check and update your address through your personal tax account.

Revenue from the Welsh rates of income tax will go to the Welsh Government.

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