Identifying the Welsh taxpayer population is the main challenge to HMRC in implementing the Welsh rates of income tax (WRIT) coming into force from April 2019, according to a report from the National Audit Office (NAO).
To address this, HMRC has set up an identification strategy for Welsh taxpayers. This includes:
• Identifying all Welsh addresses and compiling a master record of the relevant postcodes of these addresses using Office for National Statistics (ONS) data and mapping information;
• Cleansing the addresses in existing taxpayer records to ensure that they are in a consistent format to facilitate automated processing of residency; and
• Comparing both the above data sets and update taxpayer records with the appropriate flag when a Welsh address is identified.
According to HMRC estimates there were 1.35 million Welsh taxpayers in 2017-18. Taxpayer identification was due to be completed before a notification letter was sent to Welsh taxpayers last November but HMRC says around 10,000 taxpayer records were not cleansed before the letter was issued. Once these records have been cleansed, Welsh taxpayers that have been identified will receive a tax code letter to notify them of their status, says HMRC.
PAYE individuals residing in Wales will be given a tax code beginning with C. The Welsh government has set its rates at the same level as in England and Northern Ireland for the 2019-2020 tax year.
