PAYE Registration: Everything You Need to Know

This article will explain everything you need to know about PAYE Registration. We answer your questions to help you understand what an employer reference number is, how to find it and when you need it most for your business.

What is my employer reference number?

An Employer Reference Number (ERN) is a set of letters and numbers that directly identifies your business. It is a necessary reference for any UK employer to run a payroll.

This is also called your employer PAYE reference on tax forms. Your Employer Reference Number is split into two parts. The first part is a three-digit HMRC office number and the second part is a reference number unique to your business, for example: 123/AB12345.

How to find my Employer Reference Number

You do not have to apply for an employer PAYE reference number. You will automatically be issued one once your register as an employer with HMRC.

Companies999 can handle this process for you as a separate service or you can purchase our ultimate Leaders Package which includes PAYE Registration at a discounted price.

HMRC will directly send you your unique PAYE Reference and Accounts Office Reference within 14 days of registration. It can be found in your welcome pack and future forms of communication with HMRC.

When do I need an Employer Reference Number?

It is an important number and you may need it for several different purposes:

  • PAYE forms – P45, P60 and P11D
  • Employee payslips
  • Employees student loans or tax credits
  • Employer’s liability insurance
  • Income Tax and National Insurance
  • End of year PAYE return

Ensure you keep your employer reference number safe and secure throughout the year, as you will need it to complete several processes for your business.

When do I not need an Employer Reference Number?

In some circumstances, you might not have to register for PAYE and therefore you will not receive an Employer Reference Number, if your employees:

  • Are paid via an agency
  • Are paid as self-employed
  • Earn less than £113 per week
  • Are unpaid volunteers

Using your PAYE reference number for insurance

For insurance claims, your employer reference number will be used by the Employer’s Liability Tracing Office (ELTO) to establish whether your business had the appropriate insurance cover at the specific time the claimant was employed by you.

Once proven, the insurer will receive the compensation bill instead of you. Therefore, it is best to share your ERN when you arrange your employer policy with your insurance broker.

It is a legal requirement for most businesses with employees to have employment liability insurance. So make sure to involve your PAYE reference number and protect your business for future references.

I have lost my Employer Reference Number

You should be able to find your employer reference number on your original employer’s welcome pack. If you cannot find that then you should be able to find it on other forms of communication with HMRC including P45s and P60s from your employees.

Further Reading: VAT is another form of registration for businesses, we have another guide on our blog for you here.

For more information, Companies999 provide VAT and PAYE registration services for all entrepreneurs, we can handle it all for you while you focus on your business.

For any assistance contact Companies999, we will be happy to help you!

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