Most employers have at least one employer reference number (ERN). An ERN is an alphanumeric reference that identifies a business for various employment-related purposes, including running payroll.
If you plan to hire staff or pay yourself a director’s salary, you’ll need an employer reference number from HMRC. Here’s everything you need to know.
Key Takeaways
- An employer reference number (ERN) is a unique combination of letters and numbers that a business receives from HMRC after registering as an employer.
- ERNs are used for payroll and PAYE administration, employment verification, employers’ liability insurance, and PAYE compliance monitoring.
- Employers can find their ERN on PAYE correspondence from HMRC, in their PAYE Online account, on certain employer forms, and on employees’ payslips.
What is an employer reference number (ERN)?
An employer reference number (ERN) is a unique identifier that HMRC assigns to any business that registers as an employer and sets up Pay As You Earn (PAYE). Also known as an ‘employer PAYE reference’ or ‘PAYE number’, an ERN links a business’s payroll and PAYE activities to the correct HMRC tax office.
As a UK employer, you’ll need to provide your ERN when carrying out specific tasks, such as setting up and managing payroll, filing PAYE reports with HMRC, and purchasing employers’ liability insurance.
What does an ERN look like?
An employer reference number is a unique combination of alphanumeric characters. It consists of the following:
- 3-digit tax office number – this identifies the HMRC office number that deals with the employer’s PAYE
- Forward slash
- Tax office employer reference containing between 1 and 10 characters, which can be letters and numbers – this is the tax office’s reference for the particular employer
The ERN of a business that registered as an employer before 2001 will look something like this: 123/A45678.
The ERN of a business registered as an employer after 2001 will look something like this: 123/AB45678.
Where can I find my employer reference number?
After registering as an employer with HMRC (usually online), you should receive a confirmation letter and welcome pack in the post. This will include your employer reference number – it’s normally printed in the top right corner. The letter will also contain your Accounts Office reference.
Aside from this documentation, you can find your ERN in the following places:
- Your HMRC online account
- Emails and letters from HMRC relating to your PAYE registration
- Certain employer forms, such as P11Ds, P45s, and P60s
- Employees’ payslips generated by your payroll software
- Your accountant or payroll provider (if you outsource your payroll tasks)
If you can’t find your employer reference number in any of these places, you can contact HMRC’s employer helpline. They will post a reminder of your ERN to your registered office or business address, but it may take a couple of weeks to arrive.
When will I use my ERN?
Your employer reference number is a crucial piece of information that identifies your business for various PAYE purposes.
As an employer, you’ll use your ERN regularly for tasks such as:
- Setting up and running payroll
- Completing and sending a Full Payment Submission (FPS) to HMRC on or before each payday
- Issuing payslips to employees
- Sending an Employer Payment Summary (EPS) to claim reductions on what you owe HMRC (e.g. statutory pay)
- Reporting any taxable expenses or benefits you provide to your employees
- Submitting your final payroll report for the year to HMRC
- Filing any other employment-related forms or information
- Purchasing or renewing an employers’ liability insurance policy
- Dealing with employment claims
- Setting up and managing a workplace pension scheme
- Changing your payroll software
- Contacting HMRC about anything relating to your employer registration
- Providing to an employee if they are claiming tax credits, applying for Universal Credit, or managing a Student Loan
HMRC will use your employer reference number to:
- Link your employer payroll records to the PAYE scheme under which your business is registered
- Administer and collect tax through your payroll, including Income Tax and National Insurance contributions (NICs)
- Link PAYE schemes if your business has more than one
- Monitor your compliance as an employer (e.g. with payroll reporting and PAYE tax payments)
Now that you know why your ERN is so important, be sure to keep it safe and easily accessible for whenever you need to use it.
How to get an employer reference number from HMRC
To get an employer reference number for your business, you need to register as an employer with HMRC. Most businesses can register by enrolling for PAYE online, including limited companies with up to 9 directors.
Ideally, you should register before the first payday (but not more than 2 months in advance) to ensure your employer reference number arrives on time. However, if you need to pay an employee before receiving your ERN, you should run payroll, store your FPS, and send a late FPS to HMRC.
You can use HMRC’s online tool to find out how to register as an employer.
How long will it take for my ERN to arrive?
It may take up to 3 weeks to receive your employer reference number from HMRC after registering for PAYE. You can check your registration application status using HMRC’s online tool. This will tell you when you can expect to receive a reply.
You’ll also receive a separate letter with your activation code for PAYE Online. This should arrive within 10 working days of applying to register as an employer.
Do all employers need an ERN?
Not every employer is required to register for PAYE with HMRC. Therefore, you won’t need an employer reference number if:
- None of your employees (or company directors) are paid £96 or more per week (£417 per month, £5,000 per year)
- None of your employees (or company directors) receive expenses or company benefits, get a pension, have had another job, or receive taxable state benefits while working for you in the current tax year
- Your business doesn’t use subcontractors to do construction work under the Construction Industry Scheme (CIS) or reclaim CIS deductions taken from payments
- Your staff are paid through an agency or operate as self-employed
- Your business is based in the Channel Islands or the Isle of Man
However, even if you don’t need to register, you still need to keep payroll records detailing what you pay your staff.
Do some businesses have more than one ERN?
Some businesses will have two or more employer reference numbers if they operate more than one PAYE scheme. However, you’ll only have one ERN if you’re running a small business in a single location.
Employer reference number vs Accounts Office reference
The initial letter you receive from HMRC after registering as an employer will contain your employer reference number and your Accounts Office reference.
Your ERN is a unique identifier for your PAYE registration, while your Accounts Office reference is used to identify and link your PAYE payments to your PAYE Online account.
An Accounts Office reference is usually a combination of 13 characters in the following format:
- 3 numbers
- The letter ‘P’
- Another letter
- 8 numbers, or 7 numbers followed by an ‘X’
It will look something like this: 123PX00123456 or 123PX0012345X.
Employer reference number vs unique taxpayer reference (UTR)
Unlike ERNs, unique taxpayer references have nothing to do with employer registration or PAYE.
HMRC issues a unique taxpayer reference (UTR) to individuals who register for Self Assessment (e.g. sole traders) and to companies for Corporation Tax purposes.
What’s the difference between an employer reference number and a PAYE number?
There is no difference. While the official term is ’employer reference number’, many people refer to this identifier as a ‘PAYE number’ or ’employer PAYE reference’.
Need help with your PAYE registration?
We hope this post answers all your questions about the employer reference number, including its purpose, what it looks like, how to get an ERN from HMRC, and where to find it.
If you’re looking to form a limited company and need to register as an employer, Rapid Formations offers an All Inclusive Package that includes PAYE registration. This is claimable at any point after company formation, allowing you to start paying employees’ wages or your director’s salary whenever the time comes.
Please note that the information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While our aim is that the content is accurate and up to date, it should not be relied upon as a substitute for tailored advice from qualified professionals. We strongly recommend that you seek independent legal and tax advice specific to your circumstances before acting on any information contained in this article. We accept no responsibility or liability for any loss or damage that may result from your reliance on the information provided in this article. Use of the information contained in this article is entirely at your own risk.
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