When you set up a company of your own in the UK it is essential to be familiar with various tax identifiers, including what some might refer to as the “UK TIN number”. It is worth noting, however, that the direct equivalent in the UK is the Unique Taxpayer Reference (UTR) number. It is your responsibility to pay the taxes for your business and organise your national tax affairs, both within the United Kingdom and – if applicable – internationally.
Understanding terms like UTR is vital for entrepreneurs. The same goes for the broader concept of a Tax Identification Number, often referred to as the “UK TIN number”. The following guide provides detailed explanations. It also outlines other key terms and identifiers for company tax management.
What is a UK TIN number?
The Taxpayer Identification Number (TIN) is a unique identifier given to a taxpayer in many countries. It helps identify them for tax and administration purposes. Each country, issuing authority or state has its own methodology for naming and structuring a TIN.
The TIN can be a combination of numbers, letters and symbols which vary in character, format and length for each country or issuing authority. The most important aspect of a TIN number is that each one is unique and corresponds to a single business entity or individual. A TIN will never be duplicated or shared by anyone and should be kept safely in your records.
Does the UK issue TIN numbers?
The United Kingdom does not use the exact term “TIN”, although it does issue numbers that are very similar in function. You may need a TIN number for use in a particular country if you:
- Are conducting business with an overseas company.
- Are running a company in another country.
- Are taking part in financial transactions outside the UK.
The countries in question will also ask you to provide them with your UK TIN number (or the equivalent) before proceeding with any transactions or business. We will now illustrate the UK alternatives to a TIN number of which, as a business owner, you might need to be aware.
UK alternatives to TIN numbers
If you are a resident in the UK and are setting up your business in the country then you must be familiar with many other terms that are related to a TIN number and could help identify you and your company. These include the following.
Unique Taxpayer Reference – UTR
In the UK the UTR number is closely related to a TIN number. You receive your UTR number when you register your business as a limited company or enrol in Self-Assessment with HMRC. This number identifies you or your business as a taxpayer. The system automatically issues it to individuals, companies or organisations within the UK.
You will be issued with a UTR as soon as you register, although it may take up to 10 days to reach you by post. Your UTR is a 10-digit number and can be found on any correspondence or document from HMRC including:
- Your account statement
- Tax return notice
- Payment reminders
Alternatively, you can log into your online profile on HMRC and find it easily there. If you still cannot find your UTR number then you can contact HMRC directly for assistance. Our team of experts at Uniwide can also give you help with this, should you need it. Once it has been issued a UTR will never change, so it is important to store the number in a safe and secure place to avoid theft or fraud.
To register for a UTR give your full name, date of birth, address and national insurance number. Specify also the business activity that your company will undertake and give other basic details. You can also open this link:
Company Registration Number – CRN
Companies House issues a unique number, which is different from a UK TIN number, when you register your business with them. They assign this unique eight-digit number only to incorporated businesses. You will receive a Company Registration Number (CRN) if you register as a limited liability partnership (LLP) or a limited company. Your CRN is public information and can be viewed on the online public register of companies at Companies House.
Although this code is not necessarily required for taxation purposes, your CRN is still an important number for you to secure safely in your records. You may require your CRN:
- To identify your company
- To open bank accounts
- When issuing share certificates for your company
The CRN confirms your company’s legal existence. You must, by law, display your company name and CRN on all official company stationery. These days this includes not only all printed letterheads, invoices, brochures, leaflets and business cards but also your website and e-mails.
National Insurance Number – NI or NIN or NINO
Every resident of the UK is assigned a NI number, which is different from their TIN number, when they reach the age of 16. If you come to the UK to live and work and you are older than 16 then you must apply for a NI number yourself: This is a mandatory requirement for anyone who intends to work in the UK. A National Insurance number is unique for every individual and will be active for the whole of that person’s life. Even if they leave the UK and come back either a few or many years later, they must still use the same NI number that was first assigned to them. Their NI number consists of two letters followed by six numerical digits and lastly another letter.
Your NI number is not used for identity purposes but is applicable for tax contributions and any tax reductions or refunds for which you apply. Other government entities may also ask you for your NI number as well, such as:
- The National Health Service (NHS)
- Your bank and loan providers
- The local council, borough or district in which you reside
- Pension providers.
A percentage of your gross salary is deducted for your National Insurance Contribution (NIC). This varies based upon your earnings. These contributions go towards your disability and/or sickness allowance, unemployment benefits and pension. You can find your NI number on your payslips, tax letters and P60 form. Outside the UK, especially in the United States, the NI number is related to the Social Security (SS) number.
Employer Reference Number – ERN
In many countries the ERN is called an Employer Identification Number (EIN). In the UK, businesses registering with HMRC as employers receive an Employer Reference Number (ERN). Just as other countries use TIN numbers for tax, the UK tax office uses the ERN. It identifies you as an employer with employees above the Pay-As-You-Earn (PAYE) threshold. If none of your employees earn £120 or more per week then you need not register for PAYE and, hence, you need not apply for an ERN.
You can find your ERN number on any correspondence from HMRC, payslips and tax credits. You can identify it by looking for a number that is split into two by a slash. The first part of the number will consist of three digits that correspond to your HMRC office. The second part of the ERN number will refer to your business.
VAT registration number
HMRC issues businesses in the UK with a VAT registration number when they enrol for Value Added Tax. Just as a TIN number is important for identification in some countries, this nine-digit number ensures smooth and efficient trade between national and overseas business entities. UK-registered business suppliers will have the prefix “GB” attached to their VAT registration number.
If a supplier gives you an invoice without a VAT registration number then contact them about this immediately. Ensure the invoice has this number before proceeding with any transaction. You cannot reclaim VAT without a valid VAT registration number. Always, therefore, check both your own number and that of your supplier. To verify a VAT registration number’s validity, contact HMRC directly. Alternatively, you can ask for help with this from us at Uniwide Formations.
The Importance of Keeping Records in the UK Tax System
Maintaining accurate and comprehensive records is paramount for UK businesses. Proper record keeping ensures that businesses stay compliant with HMRC regulations, avoiding penalties and disputes. These records, which include details of all income, expenses and relevant tax identification numbers like UTR, CRN and VAT registration, serve as evidence of a company’s financial activities.
Moreover, accurate and comprehensive records help in making informed business decisions by offering insights into cash flows and profitability. In the event of an HMRC audit, having systematic records can expedite the review process, establishing transparency and credibility.
Furthermore, they help in accurate tax return filing, thereby ensuring that businesses pay only what they owe. Given the digital age, leveraging modern accounting software can further streamline this essential process, reducing human errors and ensuring timely updates. In essence, diligent record-keeping is not just a regulatory requirement but a cornerstone of sound financial management in the UK business landscape.
Navigating the complex world of bookkeeping and accounting, together with understanding things like TIN numbers in the UK, can be a daunting task when setting up a company. It becomes all the more overwhelming if you are trying also to manage a business by yourself. An introduction to an accountant can simplify this process. Uniwide Formations can step in to help with many of your business needs, including both company registration and introducing you to skilled accountants.