June Newsletter

What is an Employer Reference Number (ERN)?

An ERN, also known as a PAYE reference number, is a unique identifier issued by HMRC to every UK business that registers as an employer. It is used by HMRC to track and process payroll information, including income tax and national insurance contributions.

The ERN plays a vital role in ensuring that employers correctly report and pay their tax obligations. It is included in the welcome pack HMRC sends out to newly registered employers. Any business must register as an employer with HMRC, as soon as it hires its first employee who will be paid through Pay as You Earn (PAYE).

Understanding the structure of an ERN

An ERN consists of two parts. The first part is a three-digit code that identifies the HMRC office responsible for the employer’s PAYE affairs. The second part, which follows a forward slash, is a unique reference assigned to the employer by that HMRC office. Any letters in the ERN should always be entered in uppercase. Most businesses will have only one ERN, however if you run separate PAYE schemes for different business locations or divisions, you may be assigned multiple ERNs – one for each scheme.

When do I need my ERN?

Your ERN is an essential identifier used in a variety of situations, both for you as an employer and for your employees. Here are the key instances when you’ll need it:

Submitting PAYE returns – your ERN is required when completing your annual PAYE return. HMRC will typically reject submissions that do not include this reference.
Employee requests – employees may ask for your ERN to complete applications such as for tax credits, Universal Credit, student loan repayments or they may need it when speaking to HMRC about their personal tax matters.
Employer’s liability insurance – under the Employers’ Liability (Compulsory Insurance) Act 1969, employers are legally required to hold liability insurance. Your ERN must be recorded in the Employers’ Liability Tracing Office (ELTO) database, which helps employees trace their employers’ insurance details.
Correspondence with HMRC – your ERN should be included in all communications with HMRC regarding income tax and national insurance contributions.
On official employee documents – your ERN must be printed on certain statutory documents, including P60s, P45s and P11Ds.

Although not mandatory, many employers also choose to include the ERN on employee payslips for convenience.

Where can I find my ERN?

You can usually find your ERN in the following places:

Welcome pack from HMRC – when you first registered as an employer, HMRC would have sent you a welcome pack containing your ERN.
Employee documents – the ERN is often included on documents such as P45s, P60s and P11Ds issued to employees. It may also appear on payslips.
HMRC correspondence – look for it on any letters or notices you’ve received from HMRC regarding PAYE.
Your accountant or book-keeper – if you outsource your payroll, your accountant or book-keeper should have this information.
HMRC employer helpline – if you still can’t find your ERN, you can call HMRC’s employer helpline on 0300 200 3200. They can resend the reference, though it may take up to two weeks to arrive.

Please note, if you don’t have a record of an ERN, it could mean you’re not registered as an employer. This is fine if your business doesn’t have any employees. However, if you do employ staff and they earn above the PAYE tax threshold, it’s essential that you register with HMRC as an employer, without delay.

Latest Advisory Fuel Rates for Company Car Drivers

HMRC updates these rates on a quarterly basis due to fluctuations in fuel prices. The rates determine the amount that can be paid to an employee using a company car for business mileage, free from income tax.

From 1 June 2025 the rates per mile are:

The rate for fully electric vehicles will be 7p per mile. Hybrid cars are treated as either petrol or diesel cars for the purposes of advisory fuel rates.

 You can use the previous rates for up to one month from the date any new rates apply.

How We Can Help

If you have specific questions about any matters within this month’s newsletter and how they may affect you or your business, do please get in touch with us.

At Clear Vision, we’re always eager to guide and assist our clients – how ever you need us to support you through your journey as a business owner, we’re here for you!