Welsh Income Tax
Welsh income tax started in April 2019. As for Scottish income tax, its application is dependent on the residency of the employee, broadly based on pre-existing tax-residency rules — see here for more detail: https://www.gov.uk/welsh-income-tax
The employer deals with what form of income tax is payable in the normal way through PAYE — although the rates and thresholds don’t vary a great deal between the different home nations it is important to make sure the correct form of income tax is applied to each employee.
Since the introduction of the Welsh Income Tax it has been reported that a number of employers have been incorrectly treating Welsh resident employees as Scottish, giving rise to errors and issues arising (as the rates for Scottish employees are different). HMRC will notify employers as to the income tax residency of each employee through their PAYE coding notices; Welsh codes are suffixed with a ‘C’.
If you need any help or advice on the new forms of income tax or on any payroll matter please don’t hesitate to contact us.