What is an ERN?
An ERN or Employers Reference Number is provided to every business registering with HM Revenue and Customs as an employer. It's a unique combination of letters and numbers used by HMRC to identify your company and often referred to on tax forms as an ‘employer PAYE reference’. This reference is made up of two parts:
1. A three-digit HMRC office number
2. A reference number unique to your business
The ERN is provided within your employer’s welcome pack when you register with HM Revenue and Customs and appears on most HMRC correspondence.
WHEN DO I NEED AN ERN?
Your ERN will be required in a number of different circumstances, most importantly when you come to complete your end of year PAYE tax return.
An invalid or missing ERN is amongst the most common reasons for the rejection of end of year tax returns and you will need to know this number in order to meet statutory reporting obligations. It is also likely you will be asked for your ERN by an employee at some point. Employees may need your employer reference number when applying for tax credits, repaying student loans, etc. You may also be required to include your ERN on payslips.
WHAT HAPPENS IF I HAVE LOST MY ERN?
It is important to note down your ERN as you will need it regularly throughout the tax year. If you have lost the number, you will be able to find it on correspondence from HMRC relating to PAYE. It will also appear on P45s and P60s for previous or current employees.
If you do not have any record of your ERN it maybe you are not registered as an employer. If this is the case, but you are employing or intend to employ someone, it is vital that you register as a matter of urgency.
WHY DO I NEED TO GIVE MY ERN TO MY INSURER?
Because the Employers’ Liability Trading Office has set up a database of ERNs to help employees identify past employers and it sources information directly from brokers and insurers. You will therefore need your ERN when you purchase employers’ liability insurance. The ERN helps identify which firms an employee has worked for, should they ever need to make a claim.
EXCEPTIONS TO PAYE
Firms not registered for PAYE don’t have an ERN. You don’t have to register for PAYE if:
- Employees are paid as self-employed or via an agency
- Employees each earn less than £113 per week (as at 2018/19)
- Employees are unpaid volunteers
- Your business is based in the Channel Islands or the Isle of Man
If you need to know more call us on 01633 213063 or email using the contact bow below.