UTR number also known as Unique Tax Reference Number or Unique Taxpayer Reference is a United Kingdom’s equivalent of Tax Identification Number. And as expected it is required for a lot of procedures involving HMRC (His Majesty’s Revenue & Customs) – national taxing authority of the United Kingdom.
UTR number – a closer look
UTR is a 10-digit number that is used by HMRC to identify entity, when dealing with tax matters. You’ll need a UTR in order to file Self-Assessment tax return, which means that, if you are self-employed or are planning to set up a limited company, it is unlikely that you can avoid getting your UTR. Furthermore, partnerships, trusts and estates and non-profit organizations are also included in the category of entities that would typically need to register for a UTR number. UTR is also needed if you wish to have someone manage your finances for you like accountants, etc. The easiest way to understand purpose of Unique Taxpayer Reference number is to consider it necessity for HMRC to process documentation involving business related taxes, and to be more precise to allow the officials to correctly identify the entities.
Please beware, even if you are not self-employed and also were not involved in setting up a company you might still find it necessary to acquire UTR number – it is not unusual for individuals claiming PAYE tax refunds to be required to file Self-Assessment tax returns in order to complete the process.
There are two different types of UTR numbers – personal and company UTR and in case of limited company, both are required.
It is important not to confuse Unique Tax Reference Number with other, similar codes that are in use, as they are not the same and their application may greatly vary. Confusion is a likely occurrence, as there are many numbers that are bound to be issued, example being Company registration number (CRN) or the tax code.
How to get a UTR number?
Getting a UTR number is not a complicated process, however, it might take a while before you receive it after applying. It is generally considered that process of issuing UTR takes around 10 days for the UK companies – from registration to the reception of UTR number, and around 3 weeks – for companies based outside the UK. Furthermore, during the registration process authorities can be quite strict, therefore, do not be surprised if HMRC is picky about even the slightest mistakes. The above would normally suggest that this process would be costly, however, surprisingly the registration process is completely free of charge and does not require any cash input as far as procedure is involved.
If you are considering self-employment or setting up a limited company, you are not required to go through much trouble – you will be automatically registered for UTR, after you register for self-assessment tax returns on HMRC or set up a company. This requires you to notify HMRC as soon as possible, as HMRC expects you to complete registration within three months of starting a business.
There are two ways to register for UTR number, first being an HMRC online service and the second filling the paper form and posting it to HMRC. In order to complete the registration form required is information about:
- Name and Surname
- Date and place of birth
- National Insurance Number
- Contact information (email and telephone number)
- Information about business (name, nature and address)
- Business telephone number
- If applicable, the date when self-employment began
Procedure itself is very simple, especially through online service:
- Complete the registration process for HMRC online services
- Upon being issued a UTR number, register for Self-Assessment
- Upon receiving UTR activation code, activate your account within 28 days.
Where to find your UTR number?
The simplest way is to find it within the Self-Assessment welcome letter or tax return paperwork, however it can also be found within notices to file a tax return, statements of account and payment reminders as well as letters about corporation tax. Another simple way is to make use of HMRC online website, as your personal tax account will definitely help you find your UTR number online.
Another method is to request HMRC to provide your UTR number. But beware, HMRC cannot give your UTR number through a phone. It is, however, possible to call HMRC and request them to provide it. Upon receiving request, entity will get a UTR number sent through a post service, which may take up to 7 days to arrive.
In case of losing UTR number and not having any way to find it other than contacting HMRC, be prepared, as in order to combat identity theft HMRC is likely to make you prove beyond any doubt that you are who you claim you are before providing you with requested information.
Request to provide UTR
As an employee of construction sector in UK you might be surprised to find that you are paying too high taxes or that you might be incorrectly classified – as self-employed instead of PAYE. This involves the Construction Industry Scheme meant to combat shady financial operations, through withholding 20% of self-employed workers in construction sector for advance payment against tax that is yet to be owed.
If you find yourself in situation, where you are asked to provide UTR, you are likely to have encountered one of two scenarios. First one being the positive one – you are owed money and can claim it back through self-assessment tax return. Second one – there is something doubtful about employment status and this may lead to nasty circumstances very quickly. Second case might quickly develop and bring about a lot of unwanted consequences, therefore, it is highly advised to quickly solve the situation, which most likely will require help of someone with the know-how.
If you are in doubt or encountered situation you cannot understand – it might be a wise choice to ask for professional advice. A lot of problems involving tax lead to overcomplicated, from the individual point of view, procedures, and assistance of an expert might simplify or even outright solve the problem before it truly began. If you are in need of help, you will find a lot of individuals willing to lend a helping hand, especially in the financial sector – with many accounting firms available.