Do you know whether your UTR is relevant when making a VAT return? With so many tax ID systems, it can be easy to feel overwhelmed. Make sure you know how to find your business’ tax ID number and use it correctly when making payments to HMRC.

We’ll cover various identification numbers that HRMC uses, when they’re relevant, and where to find them in this article. Discover:

  • What system does HMRC use to identify different payments?
  • Where can you find each number?
  • Which numbers are for sole traders versus limited companies?
  • How you can keep track of your business’ tax more accurately

At Countingup, we want to empower new entrepreneurs to meet the challenges of business and save them time to make it a success. Learn more about the various tax ID numbers available and how you can streamline your tax payments below.

What system does HMRC use to identify different payments?

HMRC issues several different tax ID codes and numbers depending on which tax you’re looking to pay. While this helps both parties stay organised in the long term, there is a learning curve to overcome to make sure you won’t confuse one code for another.

National Insurance number

National Insurance (NI) numbers are probably the tax ID code you’re most familiar with. This is the nine-digit code you receive once you turn 16 and will look something like ‘QQ 12 34 56 A’.

NI numbers are issued to people, not businesses, so you’ll have one whether you’re a sole trader or a limited company director. NI numbers help HMRC track two types of tax payments: income tax payments and NI contributions. 

Income tax and NI contributions work similarly as there are bands and classes that you pay depending on your income and employment status. For example, sole traders pay Class 2 and 4 NI while limited company directors pay Class 1 while both pay income tax depending on their total income.

You can find a copy of your NI number on payslips from previous employers or on your NI record via your Personal Tax Account with HMRC. Find out more about National Insurance, its classes and the rates of pay in our article The ultimate National Insurance guide for the self-employed.

Unique Taxpayer References

A Unique Taxpayer References (or UTR) is a number that HMRC uses to track tax payments made by businesses. All UTRs are the same ten-digit length but sometimes can have the letter ‘K’ at the end. ‘K’ normally indicates someone is filing under Self Assessment. If you’re paying tax as a business, this will likely be the main ID number you’ll need.

UTRs are used differently depending on your type of business. This is because you can be employed and self-employed at the same time. Therefore, UTRs help HMRC track payments on income tax made by sole traders from their business’ profits and corporation tax payments made by limited companies. If you still have a day job as a sole trader, you can track your income tax payments from your main employment using your NI number (see above) and UTR from your business.

Your UTR is available to view on your business tax account on HMRC’s website. If you’re a sole trader, your UTR will also be available on your Self Assessment notice. Similarly, limited company directors can view their company’s UTR on the documents from HMRC after the company was first registered with Companies House. Find out more about where you use your UTR in our article When do you start paying tax?

VAT number

Businesses that have a turnover of more than £85,000are required to register for VAT. This applies to sole traders and limited companies 

Once registered, including for businesses who register for VAT early, you’ll be issued a VAT number on a VAT certificate. VAT numbers are either nine or twelve digits, sometimes beginning with ‘GB’. 

HMRC has made VAT an online process through Making Tax Digital. You can view your VAT number by logging into your business’ VAT account on HMRC’s website. Make sure your goods or services have the correct rates applied before making VAT payments to HMRC. Otherwise, you will be liable for the remaining shortfall. Find out more about VAT rates in our article How much is VAT for small businesses?

PAYE reference number and Accounts Office number

If your business needs to hire staff (including if you run a limited company), your business will need to register as an employer. Once you’ve registered, you’ll receive an employer PAYE reference number and an Accounts Office number. 

The PAYE number is ten digits long and allows HMRC to track Pay As You Earn (PAYE) payments to your employees, including their income tax payments and NI contributions. In contrast, the Accounts Office number is 13 digits long and is used to track your payments to HMRC of Employer’s NI contributions.

You can view both on the original letter that HMRC sent you when you first registered as an employer.

How you can keep track of your business’ tax more accurately

When starting a business and planning its growth, new entrepreneurs have so many demands on their time, including bookkeeping, planning, marketing and more. While they are each important and critical tasks, they can also often be time-consuming elements of running a business. 

Consider using Countingup to automate your bookkeeping and accountancy admin and give you time back to focus on growing your business and meeting important deadlines with less stress.

Built for small business owners, the Countingup app is the two-in-one business current account and accounting software solution. Countingup provides key business features like tax estimates from your trading and handy tools like automated invoicing and real-time profit and loss data. Countingup is also compatible with Making Tax Digital, meaning you can work with your accountant to handle your VAT returns filing all in one app and avoid the last-minute dash to find paperwork from HMRC.

Gain complete confidence in your new business’ financial records. Find out more about Countingup here and sign up for free today.