Impact of variations in national and sub-national income tax

Since April 2018, Welsh Government has had responsibility for some of the taxes paid in Wales, including the new Welsh Rates of Income Tax (WRIT) that came into force in April 2019.

The Finance Committee conducted an inquiry into the possible impact of different income tax rates across the Wales-England border.

Terms of reference:

• To examine the effects of sub-national income tax variations in international tax systems on the behaviour of low, medium and high income earners, particularly migration and tax avoidance.
• To understand how low, medium and high income earners may respond to income tax rate divergence for each tax band between Wales and England.
• To understand the level of divergence in income tax rates that could trigger a behavioural change in low, medium and high income earners in Wales and England.
• To assess the monetary impact on WRIT revenue with varying levels of tax rate divergence.
  
  

The Committee published its report (PDF, 2MB) on 2 July 2020. The Welsh Government responded (PDF 440KB) to the Committee’s report on 16 September 2020.