What is HMRC?
HMRC (HM Revenue and Customs) is the UK government department that collects taxes, pays some benefits and enforces tax and customs rules.
What HMRC is
HM Revenue and Customs was formed in 2005 by merging the Inland Revenue with HM Customs and Excise. It collects income tax, National Insurance, Corporation Tax, VAT, Capital Gains Tax, Inheritance Tax, stamp duty and customs and excise duties. It also pays Child Benefit, runs the tax side of statutory payments and enforces the National Minimum Wage.
Example
The taxes a typical small business deals with HMRC for:
| Tax | Who deals with it | How often |
|---|---|---|
| Self Assessment | Sole traders, partners, landlords, many directors | Yearly return, payments in January and July |
| Corporation Tax | Limited companies | Yearly return and payment |
| VAT | VAT-registered businesses | Usually quarterly |
| PAYE and National Insurance | Employers, including director-only payrolls | Each payday and monthly payments |
| Construction Industry Scheme | Contractors in construction | Monthly returns |
A sole trader with two employees who has passed the VAT threshold would therefore deal with HMRC for Self Assessment, PAYE and VAT, each through its own online service.
When HMRC gets in touch
Most contact is routine: reminders to file, payment demands, tax code notices and P800 calculations. Occasionally HMRC opens a compliance check or enquiry into a return. You must respond by the date given, and it is sensible to involve your accountant before replying, because what you say can affect how any penalty is calculated.
Why it matters for your business
You access HMRC services through a Government Gateway or GOV.UK One Login account, and each business has an online business tax account. You can authorise an accountant as your agent so they can file returns and speak to HMRC for you. Your UTR number is the reference HMRC uses for Self Assessment and Corporation Tax.
Fraudsters often pretend to be HMRC. HMRC does not tell you about refunds by text or email, and will not ask for bank details or threaten arrest by phone. If in doubt, check your online account or call HMRC on the number on GOV.UK. Cloudkeepers acts as agent for clients so most HMRC contact comes through us.
HMRC vs Companies House
HMRC deals with tax. Companies House keeps the public register of companies. They are separate, with separate deadlines and accounts.
Common questions
No. HMRC is the tax authority and Companies House is the registrar of companies. A limited company deals with both: it files accounts and a confirmation statement with Companies House, and files tax returns and pays tax to HMRC. Updating one does not update the other.
Your accountant requests authorisation through HMRC's agent services, and HMRC sends you a code or asks you to approve the request online. Once linked, your accountant can see your records, file returns and talk to HMRC on your behalf for the taxes you have authorised.