New rules and the Welsh Budget

On 20th December, the Welsh Government published its Draft Budget for 2022 to 2023.

The draft Budget provides detail on the Welsh Government’s financing, taxation and (Main Expenditure Groups) MEG level allocations. 

In addition, both employers and employees need to be aware of new rules which allow the Welsh Government to fine people for not working from home, when they are able to do so.

Please find below our summary of the main points you should be aware of:

Draft Welsh Budget published

The draft Budget confirms no changes are proposed to Welsh income tax rates, or Land Transaction Tax (LTT) rates and bands. 

The WRIT process for Wales involves the UK Government reducing each of the three income tax rates for Welsh taxpayers by 10p. The Welsh Government then decides whether to set the Welsh rates at 10p, thereby retaining parity between Welsh and English taxpayers. Alternatively, the Welsh Government can set different rates. 

The Welsh Government had previously committed not to take more in income tax from Welsh families for as long as the economic impact of COVID 19 lasts. Accordingly, the Welsh draft Budget proposes to set WRIT for 2022 to 2023 at 10p.

Fines where individuals go to work when they could work from home

From 20 December, new rules apply in Wales which mean people must work from home where it is reasonably practicable for them to do so. These new rules impact both employers and employees.

Employers

Employees

These new fines will cause anxiety for both employers and employees, grappling to deal with challenging economic conditions and complicated legal obligations.

Where help is needed

Employers and employees are likely to struggle to fully understand and implement some aspects of the new rule. 

Where this is the case, businesses may need to take specialist legal advice as these situations are fact specific and each case is likely to be different.

Last updated: 22nd December 2021