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HRMC: Understanding what it is


2021-07-11


What Does HRMC Do?

Income tax, company tax, capital gains tax, inheritance tax, value-added tax (VAT), excise fees, stamp duty property tax, air passenger fee, and the climate change levy are all collected by HRMC in the United Kingdom. HMRC makes sure that the taxation system is implemented and followed as efficiently as possible. It is in charge of ensuring that taxes are collected efficiently and that revenues are transferred to the Treasury. It also ensures that cash for public-sector support is easily available.

Importance of HRMC

To fight money laundering, HMRC imposes a number of rules on financial institutions. Verifying clients' names and backgrounds, keeping track of all transactions' information, and designating a committed official to ensure compliance with financial crime legislation are among these procedures.

One of HMRC's main objectives is to reduce the threat of money laundering, and they have gone to tremendous measures to achieve this goal. Financial institutions, for example, are obligated to gather information about any firms with which they have partnerships or are closely associated, in addition to information on their clients.

Role of HRMC when Forming a Company

When a limited company or limited liability partnership is formed, Companies House notifies HMRC automatically. You should receive a letter from HMRC at your registered office address shortly after your firm has been established, informing you of your tax obligations and responsibilities.

Your company's UTR (Unique Taxpayer Reference) will also be included in this letter. If you’re wondering what this is, a company's UTR is a unique 10-digit number assigned by HMRC to all new limited firms. For all tax-related purposes, these UTR numbers are used to identify firms.

Once your company has been incorporated, you must notify Companies House and HMRC. HMRC will send a letter to your Registered Office address with your UTR number within 14 days of the company's formation.

After that, you have three months to give HMRC the information they require about your business.