What is a UK tax ID number?
The tax identification number is a unique combination of letters and numbers used by HM Revenue and Customs HMRC to identify a business. This identification is mainly used for regulatory compliance and tax collection purposes. However, it is important to note that the term ‘Tax Identification Number’ is a broad term encompassing several types of codes which are assigned according to the business status and circumstances. The main types of tax identification numbers used in the UK are:
- National Insurance Number
- Unique Taxpayer Reference, also referred to as UTR
- VAT registration number
- Employer PAYE reference number
- Company registration number, also referred to as CRN
All numbers are issued by HMRC except the CRN, which is issued by Companies House.
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Purpose of tax ID numbers
Tax ID codes are essential to the UK tax system. They allow HM Revenue and Customs to:
- Identify taxpayers
- Track tax obligations
- Facilitate government tax administration
- Maintain accurate tax records
- Promote compliance
- Streamline the tax collection process
Employers can use the TIN (tax ID number) for their tax returns, access HMRC online services, make payments and more.
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How to obtain a Tax ID number for your business
The process for obtaining a Tax ID number differs based on the type of organisation. Limited companies, sole trader or limited liability partnerships each follow different routes to obtain their unique tax number:
For limited companies
Tax ID codes essential for limited companies include the Unique Taxpayer Reference (UTR) and the Company Registration Number (CRN). Upon registering with Companies House, limited companies are automatically allocated these numbers. The CRN is specifically used for identification and registration purposes, while the UTR is necessary for handling corporate tax matters with HMRC.
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For sole traders
Sole traders and LLPs operate their business as individuals when it comes to tax administration. To complete their self-assessment, they need to register and obtain their taxpayer identification number. They can do so on the Government Gateway account with HMRC.
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What is an Employer PAYE Reference Number?
The employer PAYE (Pay As You Earn) reference number is a code provided to businesses when they register with HMRC. The code is unique and includes a set of letters and numbers that are used to identify the business. The Employer PAYE reference number is needed in several situations:
- To complete the organisation’s year-end PAYE returns
- For any action conducted by HMRC concerning your business
- To include in an employee’s payslip so that they can apply for tax credits or student loans
The code can be found on the HMRC welcome pack received when the company is registered. Additionally, the code is also present in letters and emails about PAYE from HMRC. It is recommended that businesses include the PAYE reference number in their employee’s payslips to facilitate access to it. The code should appear on any P45 or P60 generated by the company.
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More on UK tax numbers
Below is an overview of other numbers provided by HMRC that businesses should keep in mind. Understanding the purpose of these numbers can help facilitate the smooth running of your business:
UTR code for individual and corporate tax
The UTR number (Unique Taxpayer Reference) is a 10-digit number issued by HM Revenue and Customs to anyone who registers for self-assessment. It is primarily used for managing personal and corporate tax affairs. This number is required to:
- Fill in tax returns for self-employed individuals
- Conduct self-assessments and fulfil other tax obligations
- Handle corporation tax obligations and file corporate tax returns
- Register for VAT and the Construction Industry Scheme (CIS)
- Register for PAYE and the Construction Industry Scheme, also referred to as CIS
- Notify HMRC of non-active business status and file dormant company accounts
- Communicate with tax authorities
The UTR can be found on your Personal Tax Account in the HMRC app or the self-assessment of previous tax returns.
Company Registration Number (CRN)
The Company Registration Number, also called CRN consists of numbers and letters. It can be found on the business’s Certificate of Incorporation. It may also be found in any correspondence with Companies House. The number is needed to:
- Filing confirmation statements
- Completing annual company accounts
- Registering for VAT and PAYE
- Communicating with government agencies, suppliers, banks, partners, employees and other stakeholders
- Issuing share certificates
- Recording the allotment of shares
The CRN code is commonly used in business communications and is shared on the organisation’s website and invoices.
National Insurance Number
The National Insurance number, also called NINo, starts with two letters followed by six numbers and a final letter. The NINo is used to identify individuals for social security processes. The code is used for:
- National Insurance Contributions (NICs)
- Tax records
- Employment and benefit claims
- Payment of tax on Personal Equity Plans and Individual Savings Accounts (ISA)
- Student loan applications
- Verifying the identity of individuals and administering state benefits.
The national insurance number can be found on payslips, P60 and any official correspondence relating to taxes.
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VAT Registration Number
The VAT Registration Number is assigned to businesses that register for VAT (Value-Added Tax). The code is essential for businesses that need to charge and reclaim VAT on goods and services.
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The employer reference number and Tax ID number are essential to ensure the business is compliant with tax regulations. Knowing the ins and outs of tax ID numbers ensures that you adopt efficient and streamlined tax administration for your organisation. Remember, each reference number is unique, the tax office reference number always stays the same and the UTR is provided when the company is incorporated. Also, the employer PAYE reference number is provided to the business when it has employees who qualify for PAYE.
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