You'll only pay Welsh taxes if you live in Wales longer than anywhere else in the UK during a tax year (6 to 5 April of the following year). If your principal residence is in Wales, you will pay Welsh income tax rates. If you move home, either to or from Wales, you'll pay the Welsh rate if you live in Wales for more than half the year. The change in your tax code does not mean that you are only a Welsh taxpayer for part of the tax year.
If you can't completely avoid stamp duty rates on the second home, you may still be able to recover some money through a tax refund. For more information about helping with municipal taxes or how to appeal a decision about reducing municipal taxes or discretionary reduction, see Help with your municipal tax: reducing municipal taxes. If you are a self-assessment taxpayer, you will file a tax return at the end of the tax year and you will be able to assess your status as a Welsh taxpayer retrospectively. If you start a new job during the fiscal year, your employer may need to apply an emergency tax code, until HMRC processes your new initial information and provides your employer with an updated tax code for you.
You can still check your tax code by checking your payment receipt or through your personal tax account. The UK government has reduced the basic, higher and additional income tax rates by 10 pence; instead, those 10 pence and any additional payments go to the Welsh government. If you pay taxes under the PAYE system (i.e. you are an employee or receive pension income taxed under PAYE), in the first instance, HMRC decides whether or not you are a Welsh taxpayer.
There is information on Welsh income tax on the Welsh Government website, which includes a calculation tool that shows how much Welsh income tax will pay and the sectors in which it is spent, such as health and education. Even if you are a Welsh taxpayer, if your employer applies an emergency tax code, this will be a UK tax code, without the prefix “C”. HMRC will change its tax code to try to ensure that the correct taxes are collected before the end of the fiscal year. The point at which people start paying the highest and additional rates of income tax is the same as in England and Northern Ireland.
Your Welsh taxpayer status for a particular tax year can only be known with absolute certainty once the tax year has ended. If you have two or more places of residence in the United Kingdom during a tax year, whether or not at the same time, you should consider which of these is your “primary place of residence” at each point in the tax year. If you don't pay taxes under the PAYE system and file an annual self-assessment tax return, you must decide whether or not you are a Welsh taxpayer (i.e. you must self-assess your status).
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