HM Revenue and Customs (HMRC)

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His Majesty’s Revenue and Customs (HMRC)

His Majesty’s Revenue and Customs (HMRC) is the United Kingdom’s tax, payments and customs authority. It collects taxes, administers certain benefits and tax credits, enforces customs and tax law, and oversees payroll and minimum-wage compliance.

Role and responsibilities

  • Collects direct and indirect taxes, including:
  • Income tax, corporation tax, capital gains tax, inheritance tax
  • Value-added tax (VAT) and excise duties
  • Stamp Duty Land Tax, air passenger duty, climate change levy
  • Administers benefits and payments such as tax credits, child benefit, statutory sick pay and statutory maternity pay.
  • Ensures employers comply with payroll reporting and minimum-wage rules.
  • Enforces customs rules for international trade and works to prevent smuggling and illicit trade.
  • Investigates and recovers unpaid liabilities (including certain student loans) and implements measures to curb tax avoidance.

HMRC’s collections and transfers to the Treasury fund public services across the UK. It also provides guidance and education to help taxpayers meet their obligations.

Main operational divisions

  • Government Banking Service: manages cash reporting and supports Treasury cash management.
  • Benefits and Credits: oversees payment and administration of tax credits and family-related benefits.
  • Enforcement and Compliance: pursues unpaid taxes, enforces the minimum wage, and administers anti-avoidance and disclosure regimes.
  • Customs: enforces customs duties, trade controls and anti-smuggling efforts.

Employer reporting and payroll

Employers report payroll information to HMRC to document wages, deductions and benefits. Common filings include:
– Full Payment Submission (FPS) and Employer Payment Summary (EPS) for payroll reporting.
– Form P45 to record an employee’s leaving details.

History and governance

  • HMRC was created in 2005 by merging the Inland Revenue and the Board of Customs and Excise (established under the Commissioners for Revenue and Customs Act 2005).
  • It is a non-ministerial department that reports to Parliament through the Treasury. The Chancellor of the Exchequer provides political oversight, while the Treasury supervises HMRC spending.

Headquarters

HMRC is headquartered in Westminster, London.

Key takeaways

  • HMRC is the UK’s central authority for tax collection, benefit administration and customs enforcement.
  • Formed in 2005 from the merger of Inland Revenue and Customs and Excise, it consolidates direct and indirect revenue functions.
  • It operates multiple divisions covering banking, benefits, enforcement/compliance and customs, and requires standard payroll reporting from employers.