If I live in Wales but work in England, do I pay Welsh or English tax rates?

Full answer

For Income Tax purposes, HMRC determines whether you are a Welsh taxpayer, a Scottish taxpayer, or a rest-of-UK taxpayer based on where your main home is located during the tax year, not where your employer is based or where you physically carry out your work. This is a common point of confusion for the many people who commute across the England-Wales border for work, particularly in areas like Chester, Shropshire, Herefordshire, Bristol and Monmouthshire where cross-border commuting is routine. If your main residence is in Wales, you are a Welsh taxpayer and are taxed using Welsh Rates of Income Tax, identified by a "C" prefix on your tax code (for example C1257L), regardless of whether your employer's office and payroll are based in England. Since the Senedd has kept Welsh rates identical to the rest of the UK for every year since devolution in 2019, including 2026/27, this residency-based rule currently has no practical effect on the amount of tax a cross-border commuter pays -- but the same principle would apply if Wales ever chose to diverge, as Scotland has done. If you move your main home partway through a tax year, HMRC uses statutory residence tests to determine which set of rates applies for that year, and your employer should update your tax code once HMRC has processed your change of address, which you can update through your personal tax account.

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More answers

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