Author: FSB Insurance Service
Your ERN, or Employer Reference Number, is a unique set of letters and numbers used by the tax office to identify all employers in the UK. You will have one if you are an employer with employees above the PAYE threshold, and it’s of vital importance that you share this with your insurer.
If you don’t have employees, or all of your employees are below the PAYE tax threshold, then no- you won’t require an ERN. Likewise, if your business is registered outside of England, Wales, Scotland or Northern Ireland you won’t need an ERN.
If you employ people above the PAYE threshold, and are registered within the UK, however, you absolutely will require an ERN. The good news, though, is that even if you’re not sure you have one, you probably do.
It is issued to you when you are registered with HMRC as an employer, and so you should be able to find it on all letters and communications you receive from HMRC.
Sometimes referred to as an ‘Employer PAYE reference’, you can find this on your tax forms, payslips, P45 and P60 forms and it will usually come in the format: 123/A12345.
If you can’t find it, or are unsure whether you are a registered employer, you should be able to contact HMRC directly to confirm and register yourself if you aren’t already.
Your Employer Reference number is of vital importance as, when you take out an Employers Liability policy you are required by law to declare it. In extreme cases, without an ERN, you may find your policy cancelled, leaving you without Employers Liability and as a consequence in violation of the law.
The reason insurers need your ERN is so that if someone makes a claim against you on your Employer’s Liability, your insurer can check the ERN to see if and when that person was employed by you, who you were insured by at the time, and help determine whether or not the claim should be paid.
Outside of Insurance, you will need an ERN when an employee applies for tax credits, student loans or a P45, and you could risk rejection when it’s time for your end-of-year tax returns if you don’t have an ERN.
If you have or are in the process of getting an Employers Liability policy, please make sure your broker and insurer both have your ERN.
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