HMRC
His Majesty's Revenue and Customs, the UK government department responsible for collecting taxes, paying certain forms of state support, and enforcing tax law. HMRC administers income tax, National Insurance, VAT, Capital Gains Tax, Corporation Tax, and many other levies. It also handles Self Assessment returns, issues tax codes, and operates the PAYE system.
How it works
HMRC was formed by merging two predecessor departments — one that handled direct taxes like income tax, and one that handled indirect taxes like VAT and customs duties — bringing tax collection and enforcement for nearly every UK tax under a single department. Its remit now spans nearly every tax a UK resident or business is likely to encounter, from the PAYE deducted from your payslip to the Self Assessment return you might file as a landlord or sole trader.
Beyond simply collecting tax, HMRC also pays out certain benefits and reliefs, administers tax credits and Child Benefit, and runs the compliance and investigation function that checks whether individuals and businesses have paid what they owe. If HMRC believes you've underpaid, it can open an enquiry into a specific return or, in more serious cases, a wider compliance check spanning several tax years.
Most of your dealings with HMRC in practice go through specific interfaces rather than the department as a whole — the PAYE system for employees, the online Self Assessment portal for self-employed people and higher earners, and the Making Tax Digital platform for VAT-registered businesses — each with its own login, deadlines, and correspondence.
Frequently asked questions
Is HMRC the same as the Inland Revenue?
Not exactly — the Inland Revenue was one of two predecessor departments that merged to form HMRC, along with HM Customs and Excise, so HMRC absorbed and replaced both.
How do I know if HMRC needs me to file a Self Assessment return?
HMRC will sometimes write to you if it believes you need to register, but the responsibility to register sits with you if you meet any of the qualifying conditions, such as being self-employed or having significant untaxed income.
What happens if I ignore a letter from HMRC?
Ignoring HMRC correspondence doesn't make a liability go away — penalties and interest continue to accrue, and unresolved issues can escalate from a simple query into a formal enquiry or debt recovery action.
Related Terms
PAYE
Pay As You Earn — the system by which employers deduct income tax and National Insurance directly from employees' wages before paying them, and remit the deductions to HMRC on their behalf.
Self Assessment
The system by which individuals report their own income, gains, and reliefs to HMRC each year through an online or paper tax return, rather than having tax collected automatically under PAYE.
Tax Year
The 12-month period used for UK tax purposes, running from 6 April to the following 5 April.
Tax Code
A code issued by HMRC to your employer to tell them how much income tax to deduct from your pay each period.