HMRC

HMRC is the department of the UK Government that’s in charge of collecting taxes. It stands for Her Majesty’s Revenue and Customs. The department is also in charge of things like: 

• Making sure employers pay the national minimum wage
• Collecting money to pay for public services
• Enforcing tax and custom laws
• Collecting Stamp Duty

The history of HMRC

The HMRC department was created in its current form in 2004. It was formed by a merger between the Inland Revenue and HM Customs & Excise, by Gordon Brown whilst he was Prime Minister. 

They are headquartered in Whitehall in London. 

In Scotland and Wales, the equivalents are Revenue Scotland and the Welsh Revenue Authority respectively. 

How does the department work?

You have to pay your taxes to HMRC every year. How you do this depends mainly on how you earned money. Principally, whether you’re employed or self-employed:

• Employed: your employer will take care of your taxes for you – but only for your salary
• Self-employed: if you’re self-employed or have other untaxed income, you need to file a personal tax return (also called a “Self Assessment tax return”)

If you need to file a tax return but don’t, be aware that HMRC will fine you. Take a took at our late penalties calculator to see how much you could owe.

The deadline to submit a Self Assessment is 31st January of the year following the one you earned money in.

When do I have to do a Self Assessment?

It’s important to remember that once you register for Self Assessment, you need to file every year until you tell HMRC to deregister you. They’ll still expect pay otherwise. You have to register online by 5th October.

Other people who need to do a Self Assessment are:

• Landlords (anyone earning rental income)
• Those claiming pension tax relief
• Self-employed
• Anyone earning more than £150,00 per year (until 2024/25)
• Investors (stocks and shares, crypto etc.)
• Business owners
• Construction workers claiming a CIS rebate