Welsh taxpayers charged the wrong rate of income tax – reaction from the Chair of the Finance Committee

Published 14/05/2019   |   Last Updated 15/05/2019

Updated 15/05/2019

The Chair of the National Assembly’s Finance Committee, Llyr Gruffydd AM, has issued the following statement after it emerged a Scottish tax code has been applied to some Welsh taxpayers, meaning they have been paying the wrong rate of tax.

“HMRC’s admission is deeply disappointing as this Committee was repeatedly given assurances that mistakes like this would not happen.

“We raised concerns about the flagging process for identifying Welsh taxpayers during our inquiries into fiscal devolution and the Welsh Government’s draft budget.

“On each occasion we were told the matter was in hand and the lessons from the devolution of income tax powers to Scotland, where there were similar issues, had been soundly learned and would be put into effect.

“We are seeking an immediate explanation of how this has happened and will be asking representatives from HMRC to appear before this Committee in the near future.”

During the Committee scrutiny of the implementation of fiscal devolution in Wales, the Committee expressed its frustration that the UK Government would not appear before the Committee on this matter - accountability for HMRC lies with the UK Government.

The Welsh Rates of Income Tax (WRIT) was introduced in April 2019. Welsh taxpayers are assigned a ‘C’ prefix in their tax code denoting where they live. 

HMRC has said that the correct codes have been given to employers, but in some cases  an ‘S’ prefix has been applied, meaning some people in Wales have been paying Scottish income tax rates.