His Majesty’s Revenue and Customs (HMRC)

Formation and development of HMRC

HMRC was established in 2005 by the Commissioners for Revenue and Customs Act. Its headquarters are in Westminster, London, and as of 2019, Sir Jim Harra is its Permanent Secretary and Chief Executive.

Formed through the merger of Customs and Excise and Inland Revenue, HMRC unified direct and indirect tax services. As a non-ministerial department, it reports to Parliament through its Treasury minister, who oversees its spending.

Interestingly, the first merger of these two public bodies happened in 1909. Shortly after, they were separated, only to be reunited almost a century later based on a 1999 Treasury Committee report highlighting a cost-saving potential of re-merging them. Although there was initial skepticism due to historical and structural differences between these departments, the merger was finalized in 2005.

What is HMRC responsible for?

Since its inception, HM Revenue and Customs has been focused on building a UK tax system that accommodates individual and business needs by ensuring—among other things—sufficient funds for public services and statutory payments such as sick pay and maternity pay. As a result, almost everyone in the UK is a direct user of HMRC services, including the administration of: 

• Income Tax

• Corporation Tax

• Capital Gains Tax

• Inheritance Tax

• Insurance Premium Tax

• Stamp Duty

• Land and Petroleum Revenue Taxes

• Child benefits

• Enforcement of the National Minimum Wage

• National Insurance 

• Regulating certain aspects of pension schemes, particularly those tax-related 

• Value Added Tax (VAT), including import VAT

• Environmental taxes, climate change and aggregates levy, and landfill tax

• Customs and excise duties

• Trade statistics

• Tax credits

• Recovery of student loan repayments

• Anti-money laundering supervisors

HM Revenue and Customs’ strategic objectives

The HMRC priorities listed on the gov.uk website outline their key strategic objectives, which can be summarized as follows:

• Collecting taxes and ensuring relevant financial support

• Making tax-related obligations easy and fraud-proofed

• Creating and maintaining a safe environment for every taxpayer

• Building a solid yet agile and resilient tax administration system capable of supporting broader economic goals

• Making a civil services career at the HMRC appealing and worth considering

Self Assessment tax returns

Self Assessment is an HM Revenue and Customs (HMRC) system that allows individual taxpayers and companies with incomes outside traditional employment to report their earnings and calculate their income tax obligations. Unlike wages and pensions, where tax is typically deducted through PAYE (Pay as You Earn), other income types require taxpayers to self-report. 

Taxpayers can file a Self Assessment tax return online or request a paper SA100 tax return form from HMRC (it’s also available for download). However, the first step is to determine whether you need to complete a tax return and, if so, register for Self Assessment. These services are available in both English and Welsh (Cymraeg).

If you are required to complete a tax return, you must notify HMRC by 5 October of each tax year to avoid potential penalties. Missing the deadlines could lead to fines and additional charges. 

HMRC online services

Anyone who needs to access HM Revenue and Customs’ online services must register either an:

• Individual account

• Organization account

• Agent account

Individual accounts

Individual taxpayers can set up either personal or Self Assessment accounts. Personal accounts can be used to check income tax estimates, claim a tax refund, or update personal information. A Self Assessment account is for sending a Self Assessment tax return if needed.

Organization accounts

Organization accounts are required for businesses and trusts that need to be registered with HMRC. When companies set up their organization account, they can use it for various registrations and services, including:

• Registering for VAT if their taxable income exceeds £85,000

• Setting up PAYE once they began employing staff

• Registering for Self Assessment if it’s a one-person business or sole trader

• Adding Corporation Tax services if it’s a limited company

Agent accounts

Tax agents and advisors can use HM Revenue and Custom services on behalf of their clients by setting up an agent account.

HM Revenue and Customs app

The HMRC app is available for both Android and iOS users, and you can download it via 

• Google Play Store

• Apple Store

With the app, users can check:

• Their National Insurance Number

• Tax credit payments, including amounts and when they will be received

• Self Assessment tax balance (if applicable) 

• Income and employment history from the past five years

• And more 

For detailed information and guidance on using the app, visit hmrc.gov.uk.