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What is an employer PAYE reference number (or ERN) – a simple guide

3-minute read

Sam Bromley

5 July 2019

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An employer PAYE reference number is also known as an Employer Reference Number, or ERN. It’s an important piece of information that you should hold on to after hiring your first employee.

Employers registered with HMRC will end up with lots of reference numbers, which can get confusing, but it’s important to keep track of them. And when it comes to buying employers' liability insurance, your employer PAYE reference number (ERN) will be especially important.

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What is an Employer Reference Number?

An employer PAYE reference number is given to every business that registers with HMRC as an employer. It’s a unique set of letters and numbers used by the taxman and others to identify your firm.

This reference is made up of two parts: a three-digit HMRC office number, and a reference number unique to your business. It’ll usually look something like 123/A45678 or 123/AB45678 (though there can be exceptions).

You'll receive it in your employer’s welcome pack when you register with HMRC, and you'll find it on some of your correspondence from them.

Is a PAYE reference number different to an ERN?

It doesn’t help that an Employer Reference Number can be called lots of different things. HMRC calls it an employer PAYE reference number on their ‘Register as an employer’ page.

It can be shortened to ERN and is also known simply as an employer PAYE reference, but don’t be put off by all the different names – they refer to the same thing.

When do I need an ERN?

HMRC needs your ERN in a number of different circumstances. Perhaps most importantly, you’ll need it when you come to complete your end-of-year PAYE return. An invalid or missing ERN is one of the most common reasons end-of-year returns are rejected – you’ll need to know this number to meet your statutory reporting obligations.

It’s also likely that you’ll be asked for your ERN by an employee at some point. Employees often need their employer’s PAYE reference number when applying for tax credits (or Universal Credit), applying for Student Loans, and a few other tasks. You may also be required to include it on payslips.

It's important to have your ERN to hand when you buy employers’ liability insurance. This is so you can identify the firms an employee has worked at if there's a claim a long time after the event – for example, in the case of mesothelioma claims relating to exposure to asbestos.

What if I have lost my ERN?

It’s important that you keep hold of your employer PAYE reference number, as you’ll need it regularly throughout the tax year. If you lose it, you’ll be able to find it on letters or emails about PAYE from HMRC. It’ll also appear on any P45s or P60s for previous or current employees.

If you don’t have any record of your ERN, it may be that you’re not registered as an employer. If this is the case, but you are employing or intend to employ someone, you should register as soon as possible. Check our What's my employment status? guide to work out what applies to you.

Why do I need to give my ERN to my insurer?

The Employers' Liability Tracing Office (ELTO) has set up a database to help employees identify their past employers' insurers, making it easier to claim. You’ll therefore need your ERN when you buy employers' liability insurance.

This is so you can identify which firms an employee has worked for in case they make a claim against you. Say they develop mesothelioma after exposure to asbestos and claim you’re responsible. Using ERNs, it’s easy to see where else that employee has worked (and, for the sake of this example, find out they were only exposed to asbestos in their previous job).

Exceptions to PAYE

In some cases you may not have to register under PAYE and therefore won’t have an employer PAYE reference number. You don’t have you register for PAYE if:

  • your employees are paid as self-employed or paid via an agency
  • your employees each earn less than £118 a week
  • your employees are unpaid volunteers
  • your business is based in the Channel Islands or the Isle of Man

If you have a Simply Business policy with us, please submit your employer PAYE reference number (ERN) if you haven’t already.

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We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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