HMRC stands for ‘Her Majesty Revenue and Customs’. They used to be known as the Inland Revenue, which many people still refer to them by.
What is the Main Function of HMRC?
HMRC is responsible for the UK tax, payments and customs systems, collecting money to pay for public services and help families and individuals with targeted financial support.
Here’s how they describe themselves: “We help the honest majority to get their tax right and make it hard for the dishonest minority to cheat the system” (source: HMRC)
What Power Does HMRC Have?
For the small minority who are intent on defrauding the tax-man, HMRC has the power to:
- Apply for orders requiring information to be produced
- Execute search warrants
- Make arrests and search premises
- Recover criminal assets
How Will I Know if I am Being Investigated by HMRC?
You may not know that you are being investigated by HMRC in the early stages because they will be looking into your affairs to try to help them decide whether they need to carry out further investigation. If they feel further investigation is required, then they will formally contact you usually by letter detailing the further information they require from you.
Once they have received the information requested and find that they are happy with it, you’ll be notified that your case will be closed. However if they feel a more extensive investigation into your affairs is required they will request more information and, if required, request to meet with you.
How Far Back Can HMRC Investigate
HMRC can go back up to 20 years to investigate the affairs of someone they believe has committed tax evasion. Most commonly HMRC will go back up to 6 years however if the case warrants it, they can go back as much as 20 years.
What is HMRC in Business?
If you work for yourself, whether as self-employed (sole trader), LTD Company or as part of a partnership, then you’ll need to liaise with HMRC to file your tax return online and make your tax payments.