We are sharing this update from ACCA, our professional body, for the interest of clients and contacts. The content is (c) ACCA
For our Clients in Wales, here is a useful summary from ACCA
The draft Welsh Government Budget for 2024/25 was published on 19 December 2023.
There will be an extra £450m funding for the NHS, on top of the additional £425m which was announced in October for the remainder of this financial year. Every other department faces real terms cuts, with rural affairs worst hit, and cuts to skills and employability support.
The core local government settlement, which along with local council tax, funds services including schools, social services and social care, bin collections and local leisure facilities, saw a 3.1% increase.
Welsh tates of income tax (WRIT)
WRIT was introduced on 6 April 2019. Income tax is partially devolved to Wales, which means that while the Welsh Government is able to vary the three income tax rates (basic, higher and additional) for Welsh taxpayers, all other aspects of the tax remain the responsibility of the UK government, and HMRC continues to administer income tax in Wales.
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.
| UK rate for England and Northern Ireland | Taxable income band | UK rate paid in Wales | Welsh rate | Total rate for Welsh taxpayers |
| £ | % | % | % | |
| Basic rate 20% | 1–37,700 | 10 | 10 | 20 |
| Higher rate 40% | 37,701–125,140 | 30 | 10 | 40 |
| Additional rate 45% | Over 125,140 | 35 | 10 | 45 |
Non-domestic rates
The government has taken the decision to cap the increase to the non-domestic rates multiplier for 2024/25 to 5%. This is lower than the 6.7% increase that would otherwise apply from the default inflation of the multiplier in line with CPI and will benefit all ratepayers who do not already receive full relief.
The government will also be investing an additional £78m to provide a fifth successive year of support for retail, leisure and hospitality businesses with their non-domestic rates bills. Eligible ratepayers will receive 40% non-domestic rates relief for the duration of 2024/25. As in previous years, the relief will be capped at £110,000 per business across Wales.
The government will continue to support ratepayers with increased liabilities following the 2023 non domestic rates revaluation. The transitional relief scheme continues to phase in changes for eligible ratepayers at a cost of £38m in 2024/25.
From 2024/25, the non-domestic rates system will also include new measures to support ratepayers investing in property improvements and renewable energy.
Land Transaction Tax (LTT)
Changes to LTT main residential rates were made last year and took effect from 10 October 2022. 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 have been made to other rates, including the higher residential rates. No changes have been made to any LTT rates or thresholds since 10 October 2022.
| LTT Residential main rates (from 10 October 2022) | |
| Price threshold | LTT rate |
| £0 to £225,000 | 0% |
| More than £225,000 to £400,000 | 6% |
| More than £400,000 to £750,000 | 7.5% |
| More than £750,000 to £1.5m | 10% |
| More than £1.5m | 12% |
| LTT higher residential rates (from 22 December 2020) | |
| Price threshold | LTT rate |
| £0 to £180,000 | 4% |
| More than £180,000 to £250,000 | 7.5% |
| More than £250,000 to £400,000 | 9% |
| More than £400,000 to £750,000 | 11.5% |
| More than £750,000 to £1.5m | 14% |
| More than £1.5m | 16% |
| LTT non-residential main rates (from 22 December 2020) | |
| Price threshold | LTT rate |
| £0 to £225,000 | 0% |
| More than £225,000 to £250,000 | 1% |
| More than £250,000 to £1m | 5% |
| More than £1m | 6% |
| LTT non-residential lease rent (from 22 December 2020) | |
| Price threshold | LTT rate |
| £0 to £225,000 | 0% |
| More than £225,000 to £2m | 1% |
| More than £2m | 2% |
Landfill Disposals Tax (LDT)
The Welsh government proposes to increase the LDT rates in line with RPI inflation as forecast by the Office for Budget Responsibility, with effect from 1st April 2024. This continues the policy of maintaining consistency with the UK government’s approach to Landfill Tax (LfT) rates and increasing in line with forecast inflation at the start of each financial year.
The draft Budget will now be scrutinised by Senedd Committees before a Budget debate in February and publication of the final Budget on 27 February 2024.