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What Does HMRC Stand For + Affect the UK Self-Employed?

HMRC is one of the biggest government bodies in the UK, affecting almost everyone somehow. But what does HMRC stand for? And how does it affect you if you’re self-employed? In this article, I’ll explain what it all means and share the most common ways you report to them knowingly or unknowingly.

What Does HMRC Stand For?

HMRC stands for HM Revenue and Customs. It is sometimes ‘affectionately’ referred to as ‘the tax man‘ because they are the government body responsible for the administration of the UK tax system.

How HMRC Affects You If You’re Self-Employed

Almost every UK individual and business reports to HMRC in some way, whether it’s paying tax, filling in forms or receiving tax credits.

It means that if you’re self-employed or getting a payslip you’ll have dealt with HMRC already, either directly or through your employer.

What Does HMRC Deal With?

HMRC’s main job is to ensure sufficient money is available for the UK’s public services by enforcing the tax rules and collecting tax money.

They deal with all the different types of taxes including:

  • Income tax
  • Corporation tax
  • Capital gains tax
  • Stamp duty
  • VAT
  • Inheritance tax
  • National insurance
  • Tax credits
  • Child benefit

So if you’re self-employed you’ll be dealing with HMRC when it comes to registering your business and reporting to them about your self-employed tax (with a tax return) and paying your tax bill.

If someone employs you, they’ll be deducting tax and national insurance from your payslip and paying it over to HMRC on your behalf. This may mean you’ve never had any direct dealings with HMRC.

FAQs

Why is HMRC called HMRC?

HMRC stands for HM Revenue & Customs and the name came about when it was formed in 2005 as a result of combining the Inland Revenue and Customs and Excise departments.

Who owns HMRC?

HMRC is a government body not owned by any specific person – officially they’re owned by the UK taxpayer.

Why do we pay HMRC?

HMRC is responsible for ensuring money is available for all the UK’s public services, like the NHS and providing to financial support to individuals, families and businesses. They do this from the tax money they collect from UK individuals and businesses.

What is the HMRC wealthy team?

HMRC have a unit dedicated to ensuring that wealthy individuals pay the right amount of tax, not just to stop fraud but to help individuals with complicated tax affairs get their taxes right. A ‘wealthy individual’ is defined as a UK resident with assets of £2 million and/or an income of £200,000 or more – that equates to 800,000 individuals.

Who is Britain’s biggest taxpayer?

Alex Gerko topped the list of UK taxpayers in 2024 according to the Sunday Times. As a financial trader and founder of XTX Markets, he paid £664.5m in tax.

Want to Read More About Self Employment Tax?

If you’ve enjoyed this post you may like to read more about self-employment tax. Here are some of my most popular blog posts on this topic…

Any Questions?

I’d love to help if you have any questions about this topic. Feel free to ask over in my group ‘The Self-Employed Club‘.

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