An ERN is an employer reference number, also known as an employer PAYE reference number. 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 is especially important.
The ERN number is given to every business that registers with HMRC as an employer. It’s a unique set of letters and numbers used by HMRC 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 find it in the welcome pack you received when you first registered as an employer with HMRC. Plus, you'll find it on some of your correspondence from them and you should also find it on payslips, P45s, P60s, or P11Ds issued to past or present employees.
It doesn’t help that an employer reference number can be called lots of different names. HMRC calls it an employer PAYE reference number on their ‘Register as an employer’ page.
It’s usually shortened to ERN and is also known simply as an employer PAYE reference or tax office reference number, but don’t be put off by all the different names – they refer to the same number.
As mentioned, you get your PAYE reference number when you register as an employer with HMRC.
You usually have to register when you start employing staff, or subcontractors for construction work, for example. You also have to register if you run a limited company by yourself, because as a director you’re an employee.
Here’s what you need to do:
HMRC needs your ERN in a number of different circumstances, including when you 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 need 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 applications. You may also be required to include it on payslips.
Finally, you need 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.
It’s important to 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 in 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’re employing or intend to employ someone, you should register as soon as possible. Read our employment status guide to work out what applies to you.
The Employers' Liability Tracing Office (ELTO) has set up a database to help employees identify their past employers' insurers, making it easier for them to make an employers’ liability claim. You’ll therefore need your ERN when you buy employers' liability insurance.
The HMRC ERN helps you 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).
You won’t have an employer PAYE reference number if you don’t have to register under PAYE. You don’t have you register for PAYE if:
You'll also have a unique tax payer reference (UTR) for your business (sole traders also have an individual UTR). This is sometimes called HMRC's tax office reference number.
If you have a Simply Business policy with us, please submit your employer PAYE reference number (ERN) if you haven’t already.
Sam has more than 10 years of experience in writing for financial services. He specialises in illuminating complicated topics, from IR35 to ISAs, and identifying emerging trends that audiences want to know about. Sam spent five years at Simply Business, where he was Senior Copywriter.
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