Income Tax Act 2007 section 6B

The Welsh basic, higher and additional rates

Section 6B sets out how the Welsh basic, higher and additional rates of income tax are calculated for Welsh taxpayers, using a three-step formula that adjusts the standard UK rates.

• The Welsh rates are derived from the standard UK basic, higher and additional rates by deducting 10 percentage points and then adding the Welsh rate set by the National Assembly for Wales.
• The National Assembly for Wales has the power to set its own Welsh rate, which may differ from the 10 percentage points removed, resulting in a net rate that could be higher, lower or the same as the UK rate.
• If no Welsh rate is set by the National Assembly for Wales, the effective rate for Welsh taxpayers would be 10 percentage points below the corresponding UK rate.
• The rules governing how the National Assembly for Wales sets the Welsh rates are found in the Government of Wales Act 2006.