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Employer Reference Number

What is an employer reference number?

Your employer reference number (ERN) is a unique set of numbers and letters, made up of two parts:

    • a number that identifies your business to HM Revenue and Customs (HMRC)
    • a three-digit HMRC tax office number.

When registered with HMRC, you’ll receive this reference in your welcome pack. On tax forms, it’s often referred to as an employer Pay As You Earn (PAYE) reference number and you need it for end of year HMRC PAYE returns.

This reference number is important for small businesses, as it’s required when you’re buying employers’ liability For information on other policies you may need, visit our business insurance page.

What is the employer reference number used for?

You’ll mainly use your ERN as a tax reference number, for tax returns at the end of the year. Without this, your PAYE return would be rejected. The reference could also be used for:

      • Employees’ tax credits
      • Employees’ payslips
      • Employers’ liability insurance

Your ERN will be used in the event of an insurance claim, as the employers’ liability Tracing Office (ELTO) will use it to track down your insure and start the claim process. It’s an important piece of information to share with your insurance broker when arranging your policy.

Without a registered ERN, your employers’ liability insurance could be cancelled.

What does an employer reference number look like?

Your ERN number is split into two parts, a three-digit tax reference number and a set of digits that identify your business to HMRC. It will look like this: 123/AB12345.

Who doesn’t need an ERN?

Some small businesses aren’t required to have an employer reference number. For example:

  • If your business doesn’t have any employees
  • If all your employees are paid a salary below the PAYE tax threshold (£11,500 a year)
  • If your business is registered outside England, Wales, Scotland or Northern Ireland (in Jersey or Guernsey for example).

If you’re unsure about whether you need an ERN or not, contact HMRC

Why do I have more than one ERN?

If your business operates with separate PAYE schemes for multiple locations, HMRC may have issued you multiple employee reference numbers.

What is Pay As You Earn (PAYE)?

An employer’s PAYE is a way for HMRC to collect Income Tax and National Insurance Contributions (NICs). Employers are exempt from having to register for the PAYE scheme if:

  • Their staff are paid less than £111 per week
  • They don’t have another job
  • They don’t receive expenses or benefits
  • They don’t have a pension.

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