Definition of a Welsh taxpayer

The start of the 2019-20 tax year marked a fundamental change to the way Income Tax is calculated for people who live in Wales. The new Welsh rates of Income Tax (WRIT) is payable on the non-savings and non-dividend income of those defined as Welsh taxpayers.

The definition of a Welsh taxpayer is generally decided on the question of where the taxpayer lives. It should be noted that in order to be a Welsh taxpayer, an individual must be a UK resident for tax purposes – an individual who is not UK tax resident cannot be a Welsh taxpayer.

An individual will be a Welsh taxpayer, for a given tax year, if they satisfy any of the following three tests:

1. They are a Welsh parliamentarian
2. They have a 'close connection' to Wales through either:
   (i) Having only a single 'place of residence', which is in Wales; or
   (ii) Where they have more than one 'place of residence', having their 'main place of residence' in Wales for at least as much of the tax year as it has been in each other part of the UK
3. Where no 'close connection' to Wales or any other part of the UK exists (either, because it is not possible to identify any place of residence or a main residence) – through day counting.

For the current tax year, the rates of Income Tax paid by Welsh taxpayers will continue to be the same as those paid by English and Northern Irish taxpayers. This is because the Welsh Government has set the Welsh rates at the same level as in England and Northern Ireland for 2019-20.