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PAYE & Tax Reference Numbers: Don’t Let These Codes Confuse You

Author Osome Content TeamOsome Content Team

7 min read
Tax Advice

Your company has several numbers and codes that go on official documents. Different HMRC departments issue them to identify your company. Let’s figure out which one means what.

PAYE & Tax Reference Numbers: Don’t Let These Codes Confuse You

Your company has several numbers that go on official documents. As the business has different obligations, they are dealt with by different HMRC departments. To identify your company, they all attribute codes to you.

So what exactly are these codes? For those who have existing businesses, you might have heard of UTR which is also known as a unique tax reference number. This is just one of the many codes you need to know for your business. There are other codes that are assigned to your business.

Likewise, if you are planning to start their business in the UK, you will need to familiarise yourself with UTR and other similar codes as this will help you in your business operations. However, we know it’s not that easy as it may involve handling plenty of paperwork.

For a person who doesn't deal with neither accounting nor bookkeeping every day, the names and the purposes of these codes are quite confusing. So let’s quickly sort them out. And don't forget that you can always trust your bookkeeping or accounting online services to us.

Unique Taxpayer Reference (UTR)

Save The Dates for Annual Filing Requirements

After setting up a Limited Company forms and payments to file, all with different deadlines.

Unique Tax Reference (UTR) is a 10-digit number provided by HMRC when a person registers for self-assessment or sets up a Limited Company. You will need your company UTR number when submitting the Company Tax Return.

corporation tax payment reminder

HMRC also issues UTRs for individuals. They are called the same and are both 10 digits long, but your company’s UTR and your own one are different. Self-employed people, sole traders and business owners use their Unique Taxpayer References to submit their tax returns to HMRC. A Unique Taxpayer Reference number goes on self-assessment forms.

Since the Unique Tax Reference number will be included in self-assessment form, some might wonder: is the Unique Taxpayer Reference number the same as the National Insurance (NI) number? The answer is no. NI number is used for the UK’s social security system. In fact, HMRC will request for your NI number when you register for UTR.

Now you may ask: what happens if I lose my company UTR number? In this case, you may request a company UTR number online, so long as your company is registered with Companies House. You just need to provide your registered company name and registration number. Once you have completed this process, you will receive your company UTR in your registered business address’ post.

individual utr for tax return

Employer PAYE Reference Number & Where To Find It

Oops. You’ve overpaid an Employee?

We all make mistakes. Here’s what to do in case that happens.

Employer Reference Number, also known as ERN in short, consists of a unique set of letters and numbers used by HMRC to identify your business. The employer reference number consists of a three-digit HMRC office number and a reference number that is unique to your business.

An employer PAYE reference number is given to every business that hires people and has set up the Pay-As-You-Earn (PAYE) scheme.

Mind that not every employer that has employees needs to deal with PAYE — although every employer must keep the payroll records in order.

When doesn’t a company need PAYE? When none of its employers earns more than £118 a week and there are no expenses and benefits. Also, none of the employees must have either another job or a pension.

If any PAYE-registered entity employs staff, the PAYE reference number is something it cannot do without. It goes on all payroll (PAYE) papers handed out to employees and submitted to HMRC. So it can be found on payslips and Forms like P45 and P11D.

PAYE reference number can also be used when employees apply for student loans, tax credits and other applications.

So how to find the employer's PAYE reference number? An obvious place to check is a P60 form — a notice about an employee’s gross pay, tax paid, contributions to National Insurance, etc. An employer is obliged to prepare and hand out P60 forms every April.

Justin has six staff working in his own design agency. When he first registered as an employer, HMRC sent an employer’s welcome pack which included a PAYE reference number. After his first year’s office anniversary, one of his staff decided to resign. He ensured that he had placed the Employer PAYE Reference Number on P45 for his previous staff.

Here’s a PAYE reference example:

find paye reference number on p60
There it is, in the bottom right corner. Don’t confuse Employer PAYE Reference Number with Works / Payroll number — those are not the same thing

As this number identifies the employer, not the employee, a person can have different Employer PAYE Reference Numbers on papers from different employers.

Ann works in a bookshop on weekdays and in a cafe on weekends. So she receives 2 sets of the payslips and payroll papers that contain different PAYE reference numbers — one for the cafe, the other one for the bookshop.

Ecommerce Accounting

Tax Code

This one also goes on payslips but has a different purpose. Tax code is used by the employers and pension providers to calculate how much Income Tax a certain person must pay.

Different tax rates are applied to different employees. There are tax brackets and earnings thresholds that determine how much tax a certain person is to pay. Also, there are deductions one might be eligible for. It is the employer’s responsibility to keep track of all that and pay Income tax on behalf of their workers. The tax code determines how tax should be deducted in a pay period.

Account Office Reference Number

This one is issued by HMRC at the same time as they issue Employer PAYE Reference number. Account Office Reference Number is a 13-digit number required when paying to HMRC the PAYE liabilities. Any documents given to employees do not contain this number.

For those who are unfamiliar with Account Office Reference Number, it comprises three digit numbers of your tax office, two alpha characters and 8 numeric characters. Here’s an office reference number example: 123PA0045678X. If you need to verify your office reference number, you may use this online HMRC checker.

So, does it mean that the office reference number and Employer Reference Number are the same? No, they are not the same. Although HMRC issues both of these numbers to you when you register your business, they function differently. Office reference number is used for security checks when you make PAYE payments and check your PAYE. Employer Reference Number is used when you complete your end-of-year PAYE return and access tax codes, or register to receive email reminders about PAYE.

However, do bear in mind that entering an incorrect account office reference number in your PAYE return form will result in possible Real Time Information (RTI) submission failures at HMRC. This might cause a delay in getting your information to your HMRC account which will eventually lead to penalties and charges. So it is important that you enter the correct account office reference number. Confused? You may speak to our helpful accountants if you need help.

VAT Registration Number

As you can guess from the title, the VAT number is issued by HMRC for businesses when they register for Value Added Tax. The UK VAT registration number is a unique ID that has 9 digits with a prefix of ‘GB’. This number can be found in all the submitted VAT reports and on VAT certificates.

A Note on VAT Returns

VAT payment due dates might be every month, every quarter (3 months), or every year — you get to choose how long your accounting period will be.

In short, it goes on any correspondence from HMRC in relation to VAT. Also, you are obliged to show the VAT registration number on any VAT invoice you issue for your customers, including the simplified ones.

Likewise, if you have business transactions with EU countries, the EU VAT registration number will be different from the UK as they have their own unique ID. You can check HMRC for the list of ID formats from EU countries.

After receiving your VAT registration number from HMRC, you will find the VAT registration number on the top right hand corner of the letter.

vat registration number certificate

Similarly, when your supplier sends an invoice, it’s crucial to look out for their VAT registration number. If their company is VAT-registered, they should have listed their unique ID on all their invoices.

Doing a VAT registration number check is important. Why? This is to check the validity of the VAT registration number. For instance, you may have paid VAT to your supplier but the VAT registration number that they have provided is invalid. In this case, you will need to contact them. You will need to obtain the valid VAT registration number in order to reclaim your VAT.

As you begin to trade with different business partners either in the UK or wider Europe network, it is important to bear in mind that reclaiming a VAT without a valid VAT registration number will lead to HMRC rejecting your claim. In this case, you may have to pay the bill or handle even more paperwork. None of us would want this to happen. So, remember to check the validity of the VAT registration number.

Osome knows not only how to guide you through accounting and bookkeeping. We can help you open your company in the UK.

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