Unlocking Your PAYE Reference Number

FD Capital's Podcast.

Hey there, and welcome to another episode of The Tax Talk, the podcast where we simplify all things tax and payroll. Whether you're just getting started with your employment or running your own business, we've got you covered. Today, we're diving into a topic that confuses many: finding your PAYE reference number.

Now, whether you're an employee or an employer, the PAYE reference number is something you’re bound to come across. But what is it, why is it important, and most crucially, how can you find it? We’re about to break it all down for you, step by step.

Section 1: What Is a PAYE Reference Number?

Before we jump into where you can find your PAYE reference number, let's start with the basics.

The PAYE reference number is a code given to an employer by HMRC (Her Majesty’s Revenue and Customs) when they register as an employer. PAYE stands for "Pay As You Earn," which is the system used by HMRC to collect income tax and National Insurance from employees directly via payroll. The PAYE reference number is crucial because it helps HMRC identify your employer and manage the income tax and National Insurance records for each employee.

If you're an employee, this number will be attached to your pay, and it’s especially important when you're dealing with tax returns, applying for loans or mortgages, or even when switching jobs.

For employers, it’s vital for submitting payroll information, calculating deductions, and communicating with HMRC.

Section 2: Why Do You Need Your PAYE Reference Number?

So, why is this number so important? As an employee, you might need your PAYE reference number for a variety of reasons:

1. Filing Tax Returns: Whether you’re completing a self-assessment or need to check your tax records, your PAYE reference will be required.
2. Loan Applications: Banks or lenders may request this number to verify your employment or income.
3. Tax Queries: If you ever need to contact HMRC to discuss your tax code, adjustments, or any issues with tax deductions, your PAYE reference will likely be asked for.
4. Changing Jobs: When switching employers, your new employer will often use this reference number to ensure your tax records are properly transferred.

If you’re an employer, you’ll need your PAYE reference number for:

• Submitting Real Time Information (RTI) reports to HMRC.
• Issuing P60 and P45 forms.
• Ensuring the correct tax codes are applied for your employees.

So, it’s safe to say, this little number has big importance!

Section 3: How to Find Your PAYE Reference Number (For Employees)

Now, let’s get to the big question. How do you find this mysterious PAYE reference number if you're an employee?

There are several places where you can locate it:

1. Your Payslip: One of the easiest places to check is your payslip. Your employer usually includes the PAYE reference number somewhere on the slip, usually near the payroll number.

2. Your P60 or P45 Form: If you’ve ever received a P60 (the form that summarizes your pay and tax deductions for the year) or a P45 (the form given when you leave a job), you'll find the PAYE reference number listed here. The P60 is issued at the end of every tax year, so keep this form handy!

Section 4: Finding the PAYE Reference Number as an Employer

Now, if you’re an employer, and you’ve just registered your business with HMRC, you’ll be assigned a PAYE reference number for your payroll scheme. Here’s where to look for it:

1. HMRC Registration Documents: When you first register as an employer with HMRC, they send you an Employer's PAYE letter.

Section 5: What Does the PAYE Reference Number Look Like?

The PAYE reference is usually made up of two parts. The first part is a three-digit code that identifies the tax office that manages your employer's payroll. The second part is a unique reference number for your employer, often separated by a slash. For example, it might look like this: 123/AB45678.

Why not read our helpful Article on our FD Capital website.