Welsh Income Tax Explained
Wales has had the power to set its own Income Tax rates since April 2019. The Welsh government has chosen to keep rates identical to England for 2025-26.
What is Welsh Income Tax?
The Welsh Rate of Income Tax (WRIT) was introduced in April 2019. The UK government reduced each Income Tax rate by 10p, and the Welsh government added 10p back, keeping rates the same as England. The Senedd could choose to set different rates in future budgets. Welsh taxpayers are identified by a "C" prefix on their tax code (e.g. C1257L), where C stands for Cymru.
How it works
For 2025-26, Welsh rates are identical to England: 20% basic rate (£12,571 to £50,270), 40% higher rate (£50,271 to £125,140), and 45% additional rate (above £125,140). The Personal Allowance and NI thresholds are the same across the UK. If the Welsh government were to increase or decrease any band by, say, 1p, all Welsh taxpayers would see the change reflected in their PAYE deductions automatically.
Real example
Rhys lives in Cardiff and earns £40,000. His tax calculation is identical to someone in Manchester on the same salary: £5,486 in Income Tax, £2,194 in NI. His C1257L tax code produces the same deductions as 1257L in England. The only practical difference is administrative: HMRC tracks Welsh tax revenue separately for the Welsh government.
Who does this affect?
Anyone whose main home is in Wales. Around 1.5 million Welsh taxpayers are identified by the C-prefix tax code. Your employer uses your address to determine whether you are a Welsh taxpayer, and HMRC issues the appropriate code.
HMRC source
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