HMRC

HM Revenue and Customs (HMRC) is the UK Government department responsible for collecting taxes, paying certain state benefits, and administering customs. It employs approximately 65,000 people and collects around £800 billion annually — the principal funding mechanism for UK public services. HMRC was created in 2005 from the merger of the Inland Revenue and HM Customs and Excise. It operates under a ministerial direction from HM Treasury but has substantial operational independence.

HMRC's role in the UK's startup ecosystem is primarily through tax policy administration. The Venture Capital Trust (VCT) scheme, the Enterprise Investment Scheme (EIS), and the Seed Enterprise Investment Scheme (SEIS) collectively channel billions of pounds annually into early-stage UK companies. In 2025, HMRC implemented a cut in the VCT income tax relief rate from 30% to 20% — the first change in the scheme's history — following a policy review questioning whether the relief produced sufficient economic value relative to its fiscal cost. HMRC also quadrupled EMI (Enterprise Management Incentive) share option thresholds in 2025, raising the employee limit from 250 to 1,000 and the share value limit from £3m to £10m, representing the most significant EMI expansion since the scheme launched. HMRC's own 2024/25 statistics, published in May 2026, showed the number of investors claiming EIS relief fell 7% to 33,220, even as total EIS investment held flat at £1,575m and SEIS investment rose 14% to £276m — the retail angel base thinning just as the VCT cut compounded it.

In the UK elections context, HMRC's name appeared in May 2026 in relation to Angela Rayner: the agency confirmed it had cleared Rayner of any tax irregularity relating to the sale of her Stockport council house, removing a potential obstacle to her leadership candidacy. HMRC's tax-policy decisions also affect election-cycle politics indirectly — the VCT relief cut fed into the Conservative and Reform narratives on entrepreneurship and 'pro-growth' economic policy.