Welsh Taxes: What's new 2025?

What’s new for Welsh taxes in 2024-25? What updates have occurred this year? What changes must be implemented for 2025/26?

Welsh Rates of Income Tax (WRIT)

Rates and allowances for 2024-25 and 2025-26:

The Welsh rate of Income Tax rate will remain at 10%.
This will retain parity between the rates of Income Tax in Wales and England/Northern Ireland with rates being 20%, 40% and 45%.

Landfill Disposals Tax (LDT)

From 1 April 2025:

The lower rate of Landfill Disposals Tax (LDT) will be increased to £6.30 from £3.30 per tonne.
The standard rate increases to £126.15 from £103.70.
The unauthorised rate is 150% of the standard rate, this increases to £189.25 from £155.55.

Land Transaction Tax (LTT)

From 11 December 2024:

LTT reliefs update:

In April 2024, the Welsh Government published a consultation on proposed changes to LTT reliefs. The consultation closed on 19 May 2024.
Alongside wider reforms, it was proposed that Multiple Dwellings Relief (MDR) would be abolished from 1 June 2024.
Responses were published in July 2024 with no changes being announced. The Welsh Government is continuing to investigate its options.

Combined use of Multiple Dwellings Relief (MDR) and the Subsidiary Dwelling Exception (SDE)

From 7 February 2025:

New regulations came into force on 7 February 2025 to remove the ability to make a Multiple Dwellings Relief (MDR) claim in respect of multiple-dwelling transactions which are subject to the LTT main residential rates, rather than higher rates, due to the application of the Subsidiary Dwelling Exception (SDE).
The Land Transaction Tax (Modification of Relief for Acquisitions Involving Multiple Dwellings) (Wales) Regulations 2025 will apply to all land transactions with an effective date of after 7 February 2025, subject to a transitional rule for certain land transactions effected in pursuance of a contract entered into before 7 February 2025.

Further LTT updates in 2024-25:

In October 2024, draft Land Transaction Tax (Relief for Special Tax Sites) (Wales) Regulations 2024 were laid before the Snenedd Cymru. If these are approved they will provide relief from LTT for qualifying transactions within a designated special tax site.
The LTT higher residential rates three-year exception and refund period has been extended for homeowners where their sale is prevented or delayed due to fire safety defects or emergency restrictions.

Non-Domestic Rates (NDR)

The rate multiplier increased to 56.2p (from 53.5p) in 2024-25. The rate for 2025-26 will be 56.8p.
Support for retail, leisure and hospitality businesses is currently available by way of 40% NDR relief for the duration of 2024-25, capped at £110,000 per business. It was announced in December 2024, the 40% NDR relief will continue to be available for 2025-26.
A fund will be developed to provide support to eligible small to medium-sized businesses in the retail, leisure and hospitality sectors, with funding to be used during 2024-25 to invest in measures to future-proof their businesses.
The Local Government Finance (Wales) Bill was introduced into the Senedd on 20 November.
- This will provide the legislative basis required to implement non-domestic rates reform for Wales, along with three-yearly revaluations.
- See Reforming Non-Domestic Rates in Wales below.

Independent schools and non-domestic rates

From 1 April 2025:

Independent schools with charitable status will no longer be eligible for charitable non-domestic rates relief, bringing them in line with other independent schools.

Reforming non-domestic rates in Wales

The Welsh government intends to move forward with the development of the proposals, including three-yearly revaluations, supporting information requirements, and improvements to the administration of rating lists.
Powers will be sought to enable secondary legislation to implement changes in relation to reliefs, exemptions, varying the multiplier, and anti-avoidance measures.

Visitor levy

The Visitor Accommodation (Register and Levy) Etc. (Wales) Bill was introduced in November 2024.
It allows local authorities to introduce a levy on overnight stays in visitor accommodation.
The levy is set at 75p per person per night for stays at campsites and hostels, and £1.25 per person per night for all other types of accommodation.

Licensing of visitor accommodation & LTT changes

A Consultation on licensing Welsh holiday accommodation followed, with an analysis of responses being published in July 2023.
In January 2024, the introduction of a statutory visitor accommodation registration and licensing scheme was confirmed.

Business rates and self-catering accommodation in Wales.

From April 2023, the criteria for self-catering accommodation to be liable to business rates rather than Council Tax became 252 days (previously 140) and the letting requirement became 182 days (previously 70).