HMRC Explained
HM Revenue and Customs is the UK government department responsible for collecting taxes, paying benefits and enforcing tax law. They handle Income Tax, NI, VAT, Corporation Tax and customs duties.
What is HMRC?
HMRC (HM Revenue and Customs) was formed in 2005 by merging the Inland Revenue and HM Customs and Excise. It is the UK's tax authority, responsible for collecting around £800 billion in revenue per year. HMRC administers Income Tax, National Insurance, VAT, Corporation Tax, Capital Gains Tax, Inheritance Tax, Stamp Duty, customs duties, and various excise duties.
How it works
For most employees, HMRC operates in the background through the PAYE system. Your employer deducts tax and NI from your pay and sends it to HMRC. You can manage your tax affairs online through your Personal Tax Account at gov.uk, where you can check your tax code, view your tax estimate, claim refunds and update your details. HMRC also runs the Self Assessment system for self-employed people, landlords and others with untaxed income. Their main phone line for general enquiries is 0300 200 3300.
Real example
When you start a new job, HMRC sends your tax code to your employer. If your code is wrong (causing you to overpay), HMRC should spot the error and send you a P800 after the tax year ends. You can also contact them directly through your Personal Tax Account to fix the issue faster.
Who does this affect?
Every taxpayer in the UK interacts with HMRC, whether directly or indirectly through their employer. HMRC employs around 66,000 staff across the UK. If you need to contact them, the quickest route is usually through the online Personal Tax Account at gov.uk, rather than the phone lines which can have long wait times.
HMRC source
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