Who acts as an agent for HMRC?

A business registered for VAT acts as an agent for HMRC because it is responsible for collecting Value Added Tax (VAT) on behalf of the government. When a business registers for VAT, it undertakes the obligation to charge VAT on its sales, keep accurate records of these sales, and submit VAT returns regularly. This role involves ensuring compliance with tax legislation and facilitating the flow of tax revenue into the treasury, which is a key function of HMRC.

Other types of entities listed do not have the same responsibilities or legal obligations. A business that pays VAT may merely be a consumer in another context, while a common consumer does not collect tax as it engages in purchasing goods without the obligation to manage tax on behalf of HMRC. Similarly, a company that sells goods isn't inherently an agent for tax unless it is also registered for VAT and fulfills the associated requirements. Ultimately, the role defined here supports the idea that registered VAT businesses serve as essential intermediaries in the tax system, enforcing tax laws and ensuring that HMRC can effectively manage VAT collections.