The cash collected from devolved taxes in Wales, which are utilised by the Welsh Government for its expenditures, has seen a decline of more than £120m. In the financial year 2023-24, the Welsh Revenue Authority (WRA) gathered £330.2m net from the Land Transaction Tax (LTT) and Landfill Disposals Tax (LDT), compared to £418.6m in the previous year. LTT decreased from £372.1m to £269.8m, with £202m from residential deals and £67.2m from commercial transactions. LDT dropped from £42m to £29.7m. The cash remitted to the Welsh Government via the Welsh Consolidation Fund was £298m, down from £422m the preceding year.
These taxes have been devolved for six years, and there is no safety net in the funding settlement between the UK Treasury and Welsh Government to counterbalance any annual decrease in tax revenue. The chief executive of the WRA, Dyfed Alsop, attributed the fall in tax collection to a downturn in LTT transactions and a decrease in waste disposals subject to LDT. External payments for consultancy services nearly doubled during the year to £612,000, primarily due to preparations for a potential tourism tax in Wales. The WRA worked on developing this new service in collaboration with stakeholders such as accommodation providers and local authorities.
Despite challenges, the WRA reported that the majority of taxpayers filed returns on time and transactions were accurately submitted. The Welsh Government has the authority to adjust income tax bands by 10p but has maintained alignment with the UK Government. The WRA’s financial report for 2022-23 highlighted its success in managing tax returns efficiently and safeguarding additional revenue. With ongoing efforts to enhance tax compliance and effectiveness, the WRA remains committed to supporting taxpayers and managing taxes proficiently.