Taxation in Wales

Taxation in Wales was not documented in the Cyfraith Hywel nor in the time after it.[3] The Norman conquest of England brought some areas of Wales under the control of William the Conqueror, but the Domesday Book shows little success in establishing a framework for taxation for Wales.[3] Although areas of Powys began to see land ownership recorded for future taxation, little of that county, let alone the rest of Wales, was ever recorded.[3]

The conquest by Edward I of the remainder of Wales by 1283 brought the introduction of English common law over the whole of the country. Welsh law continued in force until the formal annexation of Wales through the Laws in Wales Acts 1535–1542.[4]

Welsh taxation developed from that point in line with the development of taxation in England. As England (and later the United Kingdom) was a unitary state, taxation of Welsh matters the responsibility of the Parliament of the United Kingdom and its Government.[5] The National Assembly for Wales, established Following the Government of Wales Act 1998, gained the power to legislate on matters devolved to it, subject to approval of the UK Parliament in Westminster;[5] the need for this approval was removed, and thus full lawmaking competence established, following a referendum on 3 March 2011.[5] The Wales Act 2014 devolved control of certain taxes, as well as the power to create new taxes, with UK Parliament approval; and the Wales Act 2017 moved Wales to the same reserved matters model as applies to Scotland, devolved limited authority over Welsh income taxes, and created the Welsh Revenue Authority. On 1 April 2018, the land transaction tax, replacing stamp duty in Wales, became the first uniquely Welsh tax in almost 800 years.

The Assembly was renamed Senedd Cymru (English: Welsh Parliament) in May 2020.

The administration of devolved taxes in Wales is managed by the Welsh Revenue Authority.[6]

The most recent and comprehensive assessment of taxation in Wales is a report by the Cardiff University's Wales Fiscal Analysis centre.[15] Titled Government Expenditure and Revenue Wales 2019, it found public sector revenue in Wales was £27.1 billion for the years 2017–18.[15] This represents only 3.6% the UK's whole revenues of £751.8 billion.[15]

Per capita Government revenue in Wales is £8,650, compared with £11,350 in the UK as a whole.[15]

Revenues as a percentage of GDP was estimated at 38.3%, in contrast with a figure of 36.4% for the rest of the UK.[16] The authors of the report attributed this to Wales having a lower estimated GDP than the whole UK.[17]

Wales has had lower total per capita revenues than other parts of the UK every year studied since 1999–2000.[18]

The largest sources of Government revenue in Wales, in order, are VAT (£6.4 bn), Income Tax (£4.9 bn) and National Insurance contributions (£4.5 bn).[19]

As a percentage of GDP, VAT and excise duty collect a greater share of revenue in Wales than the rest of the UK, while Income Tax and Corporation Tax shares are lower.[20]