Assembly to debate the general principles of the Landfill Disposals Tax (Wales) Bill

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The Landfill Disposals Tax (Wales) Bill was laid before the Assembly on 28 November 2016, and introduced in plenary by the Cabinet Secretary for Finance and Local Government on 29 November 2016. The Assembly will debate the general principles of the Bill on 21 March 2017.

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New Publication: Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill – Bill Summary

10 January 2017

Article by Christian Tipples, National Assembly for Wales Research Service

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

Introduction

Date of introduction: 12 September 2016

Member in charge: Mark Drakeford AM, Cabinet Secretary for Finance and Local Government

Assembly Committee responsible for Stage 1 scrutiny: Finance Committee

Stage 1 reporting deadline: 22 December 2016

The Land Transaction and Anti-avoidance of Devolved Taxes (Wales) Bill (‘the Bill’) was laid before the Assembly on 12 September 2016. The Bill was introduced in plenary by Mark Drakeford, the Cabinet Secretary for Finance and Local Government, on 13 September 2016.

The Bill is the first tax specific legislation to be introduced in the Assembly. It establishes provisions for Land Transaction Tax (LTT) in Wales, which will replace UK Stamp Duty Land Tax (SDLT) in April 2018. The Bill is the second in the series of three bills relating to the devolution of tax powers to Wales as stated in the Wales Act 2014.

The Bill follows the Tax Collection and Management Act (Wales) 2016, which received Royal Assent on 25 April 2016. The Act provided the legal framework for the future collection and management of devolved taxes in Wales and established the Welsh Revenue Authority (WRA), the body responsible for collecting and managing devolved taxes.

Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill – Bill Summary (PDF, 355KB)

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New Publication: Tax Collection and Management (Wales) Act 2016

27 July 2016

National Assembly for Wales Research Service

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

The Tax Collection and Management (Wales) Act 2016 (‘the Act’) provides the legal framework for the future collection and management of devolved taxes in Wales and establishes the Welsh Revenue Authority (WRA), the body responsible for collecting and managing devolved taxes.

Tax Collection and Management (Wales) Act 2016 (PDF, 837KB)

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Tax powers for Wales

16 May 2016

Article by Christian Tipples, National Assembly for Wales Research Service

This article is taken from Key issues for the Fifth Assembly’, published on 12 May 2016.

Wales will take control of its own taxes for the first time in over 800 years during the Fifth Assembly. What does this mean for Welsh taxpayers?

In 2018, Wales will receive the first tranche of newly devolved taxes. The Welsh Government will also acquire significant borrowing powers in this historic period. Such powers will give the new Welsh Government greater financial accountability that will require close scrutiny in the Fifth Assembly.

Which taxes are being devolved to Wales?

The Wales Act 2014 made provision for a range of taxes to be devolved to the Welsh Government. In April 2018, Wales will take control of Land Transaction Tax (LTT) and Landfill Disposals Tax (LDT).

Tax varying powers-01

What is being done to prepare for devolved taxes?

The Fourth Assembly passed the Tax Collection and Management (Wales) Act 2016 in March 2016. The Act establishes the Welsh Revenue Authority (WRA) whose main function will be to collect and manage devolved taxes.

The new Welsh Government is expected to introduce two tax-specific Bills soon after the 2016 Assembly elections to provide arrangements for implementing LTT and LDT.

How will Welsh taxes work?

1. Land Transaction Tax (LTT)

LTT will replace Stamp Duty Land Tax (SDLT) in Wales and will apply to both residential and non-residential property transactions. The major share of LTT will come from residential property transactions.

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In December 2014, the UK Government changed its approach to calculating stamp duty for residential property transactions by moving to a marginal rate system. This means each new SDLT rate will only be payable on the portion of the property value which falls within each SDLT band.

In its consultation document Tax Devolution in Wales – Land Transaction Tax the Welsh Government deemed this a fairer system for home buyers and proposed to continue operating the marginal rate system. However, the new Welsh Government will make the final decision and establish new tax rates and bands.

The UK Government also changed SDLT for non-residential property transactions (such as commercial property, agricultural land and development land) to a marginal rate system in March 2016. The new Welsh Government will need to determine how non-residential transactions are taxed when the LTT Bill is introduced in the Fifth Assembly.

2. Landfill Disposals Tax (LDT)

LDT will replace the UK Government’s Landfill Tax – a tax on disposing of waste at landfill sites. The new tax is intended to support the Welsh Government’s policies on climate change, waste, the environment and sustainable development. The Welsh Government will confirm tax rates nearer the introduction of LDT.

Will anything else be happening once taxes have been devolved?

The new Welsh Government will be given additional powers to manage its finances through a cash reserve and extensive borrowing powers.

3. Cash reserve

The Welsh Government will have access to a new cash reserve to help manage tax revenue volatility or support additional spending by providing a means for saving surplus revenues.

4. Borrowing powers

The Wales Act 2014 also includes new borrowing powers for the Welsh Government through either the National Loans Fund (NLF) or another lender. The new Welsh Government will be able to borrow from April 2018.

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Will other taxes be devolved in the future?

There are plans for devolving additional tax streams to Wales in the future. Timescales are unclear but there is potential for these taxes to either be fully devolved or start to be devolved during the Fifth Assembly.

5. Aggregates Levy

This levy is a tax on the commercial exploitation of rock, sand and gravel in the UK. The UK Government announced its intention to devolve the levy subject to the resolution of current legal challenges. The aggregates levy would raise £32 million if devolved in 2018-19 according to the Office for Budget Responsibility (OBR) forecasts.

6. Income Tax

The UK Government announced in the 2015 Spending Review its intention to remove the requirement to hold a referendum in Wales before partially devolving income tax. For each income tax rate, the Welsh Government is expected to collect 10 pence for every pound earnt over the personal allowance (up to £11,000 for 2016-17). The OBR forecasts that the Welsh Government would collect over £2 billion a year from Welsh taxpayers to spend on public services once income tax has been partly devolved.

Key sources

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