In the following guide we will explain what a tax reference number is, why you need one, and when to use it.
What is a tax reference number?
If you are employed or receive a pension in the UK you will have a tax reference number. This number is used by HMRC to locate your tax records. Using your tax reference number, you can access details of your total annual income and tax paid during the course of an employment.
If you are employed in multiple positions you will have a different tax reference number for each employment.
How do I find my tax reference number?
When you start work with a new employer you will automatically receive a new tax reference number. If you need to know how to find your tax reference number it is included on various PAYE documents you will have been provided with by your employer. Your tax reference number can be found on your P45 (given to you when leaving an employer), P60 (issued to taxpayers at the end of a tax year), payslips, or on a PAYE Coding Notice from HMRC (issued by HMRC when calculating your tax code)
A tax reference number will also be issued for any company pension schemes.
What does a tax reference number look like?
Your tax reference number is made up of three numbers followed by numbers, letters or a combination of both. The first three digits of the tax reference number relate to the tax office that deals with your employer. The remaining numbers and letters of the tax reference number are unique to each employer.
What is a Unique Taxpayer Reference (UTR)?
Many people confuse the tax reference number with the Unique Taxpayer Reference number, also known as a UTR number.
A UTR number is a 10-digit number allocated to those needing to provide a tax return. You do not need to apply for a UTR number, this will be given to you by HMRC the first time you register for self-assessment.
Your tax reference number will change with each employer but your UTR number will remain with you for as long as you are self-employed.
If you have lost your UTR number it can be found on any communication from HMRC regarding your self-assessment. The Unique Taxpayer Reference is displayed on all self-assessment forms so that your tax records can easily be identified. You will need your UTR when completing your self-assessment tax return online.
If you register as self-employed as well as being employed or having a pension, you may receive communication from HMRC including both your Unique Taxpayer Reference number and tax reference number.
Using the correct reference number when dealing with HMRC
Business owners and the self-employed will be allocated various reference numbers and it is important to use the correct number when dealing with the different HMRC departments.
Tax reference number – issued to every employer with both employees and a Pay as You Earn (PAYE) scheme set up by HMRC. The tax reference number will identify the employer and be used on all correspondence.
Unique Taxpayer Reference number (UTR) – a unique 10-digit number given to the self-employed and to be used in any communication with HMRC about self-assessment tax returns.
VAT number – a unique ID provided when registering a business for VAT in the UK. VAT numbers are nine digits long and start with the prefix ‘GB’. You cannot charge or show VAT on invoices until you have a VAT number.
Company Registration Number (CRN) – provided by Companies House when registering a business. The CRN consists of either a unique sequence of eight numbers or two letters followed by six numbers. You will need to use this number when registering for business taxes with HMRC, filling in tax returns, or paying corporation tax.
National Insurance Number (NINO) – a unique reference number issued automatically to people living in the UK when turning 16. Your National Insurance Number stays with you for life and helps HMRC ensure your tax and National Insurance (NI) contributions are recorded against your name. You can find your National Insurance number on your payslip, P60, or any communication about tax, pensions and benefits.
What is a Notice of Coding?
A PAYE Notice of Coding (also known as a form P2) is issued by HMRC at the start of each tax year for every employment or employer’s pension you have.
The Notice of Coding states your tax code as calculated by HMRC, an explanation of how your tax code has been made up, and how much tax-free income you will get in that tax year. If you think you have been put on the wrong tax code it’s important to contact HMRC as soon as possible to avoid the wrong amount of income tax being deducted from your paycheck.
If you have any questions about your tax returns, VAT, or self-assessment please get in touch with Wizz Accounting for assistance.