Employer reference number

Below we provide you with the information you need to answer any questions you may have about Employer Reference Numbers (ERNs), including why your business insurance provider requires it.

What is an employer reference number (ERN)?

An ERN is a unique reference number used to identify your business. It’s provided by the HM Revenue and Customs (HMRC) when you register your business as an employer. Typically, your ERN will consist of letters and numbers – with a three digit HMRC office number followed by a forward slash and a unique code that is used to identify your business.

Where to find your ERN on a HMRC Payslip Booklet

What is my employer reference number (ERN) used for?

Usually you will require your ERN when filling out a PAYE return at the end of a financial year. In fact, the lack of a valid ERN is a common reason for business’s end-of-year returns being rejected. As well as HMRC, your employees might also need your business’s ERN when applying for certain benefits, such as tax credits, or when applying for student loans. In addition to this you may also be required to include your ERN on your employee’s payslips.

In line with legislation introduced in 2012, your ERN also provides your insurer with vital information, specifically in instances where you have an employers’ liability insurance  policy. In cases where you have employers’ liability, but no ERN on record, you run the risk of voiding your policy. Not only will an invalid employers’ liability policy leave you vulnerable to expensive claims, but it can even carry a fine or custodial sentence in cases where you are legally required to have the policy in place. C

For more information on employer's liability insurance, visit our what is employers liability insurance page. 

What if I cannot find my ERN?

Your ERN is a vital piece of information for your business, and it’s important that you keep a reference of it safe. However, if you have misplaced your ERN, it can typically be found on most correspondence with the HMRC, including letters and employee P60s. 

If you still cannot find your ERN, it is recommended that you contact the HMRC to ensure that your business is properly registered and you have one assigned – this is particularly important if you already employ staff. 

Why does my employer reference number (ERN) have to be disclosed to my insurer?

As previously mentioned, your ERN is a unique number that is used to identify your business. This means that if a claim is made against your business, even after the event, it can be easily identified using the ERN. Typically, the task of identifying your business in the event of an insurance claim is carried out by an independent body known as the Employers’ Liability Tracing Office (ELTO), who have access to a database of ERNs for purposes of tracking down the relevant insurers to the claimed-against companies.

This new system that was introduced in 2012, stands to quickly and easily demonstrate if a business had the relevant insurance in place when a claimant’s alleged incident occurred. And, providing you do have the relevant insurance in place at the time, it would be down to your insurer to pick up the bill.

Why do I have multiple ERNs?

It may be the case that your business has multiple ERNs assigned to it. This is rare, however it can happen in the instance that your business operates with separate PAYE schemes for multiple locations. 

However, there is no change to procedure if your business does have multiple ERNs, as the ELTO will have all ERNs related to your business recorded in their database for reference. 

Do I need an employer reference number?

In some instances, your business may not require an ERN and will therefore not be able to provide one to your insurer. These instances include:

  • Businesses where its employees’ annual earnings are below the PAYE threshold. 
  • Businesses which are not registered in the British Isles (England., Scotland, Wales, or Northern Ireland).
  • Businesses which operate without employees.

Image credit: HMRC website.

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