Welsh Rates of Income Tax outturn reconciliation for 2024-25

Under the Fiscal Framework agreed between the UK and Welsh Governments in 2016, the Welsh Government’s funding is initially based on forecasts of Income Tax and updated once actual Income Tax revenues are available. 

Actual Income Tax data for 2024-25 replaces forecasts of Welsh Rates of Income Tax (made by the Office for Budget Responsibility) and forecasts of the associated Block Grant Adjustment (based on forecast of UK Government Income Tax made by the Office for Budget Responsibility).

This reconciliation process for 2024-25 can now be undertaken as HMRC have published 2024-25 Income Tax outturn data:

• Welsh Rates of Income Tax receipts are higher than forecast at the time of the 2024-25 Welsh Budget so this will increase Welsh Government self-funding by £129 million in 2027-28.
• The associated Block Grant Adjustment is lower than forecast at the time of the 2024-25 Welsh Budget so this will reduce Welsh Government’s block grant funding by £17 in 2027-28.
• The net effect is a £146 million increase in the Welsh Government’s overall funding for 2027-28.