Navigating the complex world of taxes can be a daunting experience, but it’s also crucial at the same time and requires proper management.
Tax authorities across different countries follow a tax identification number, often used to track tax records. In the UK, It is known as Tax Reference Number, a unique code assigned to individuals and businesses by His Majesty’s Revenue and Customs (HMRC)
So, In this read, I’m going to walk you through all the complications of a tax reference number. Along with how accounting byte can be a perfect solution for your overall financial strategy.
Let’s dive in!
But First, What Exactly is a Tax Reference Number?
A tax reference number is a 10-digit unique code for each taxpayer in the UK to further track their tax records and other information such as pension. It is also an important requirement to file a self-assessment tax return. So, in order to properly register yourself for a UTR number, here are some key information you need to provide:
- Your basic details such as full name, date of birth, and address.
- National insurance number.
- Contact information
- The date of the business establishment.
- What category does your business fall into?
- And, the total number of employees.
Types of Tax Reference Number
There are majorly four types of tax reference numbers, each representing a unique role in the income tax arena. Let’s take a look at them one by one:
National Insurance Number: A national insurance number is assigned to individuals for social security and pension purposes. It is also used as an identification number for tax-related matters.
Company Registration Number: CRN is a must-have, the identification number of the companies that also need to register with the companies house.
VAT registration number: As the name suggests, VAT is used to identify the business with VAT-related matters.
Self-Assessment registration number: Self-employed individuals or even business partners are required to register for a self-assessment registration number within the HMRC.
Factors to Consider in Getting a UTR Number
There might be many instances where HM Revenue & Customs (HMRC) will not issue a Unique Taxpayer Reference (UTR) number. So, below I have mentioned a few of the factors to consider for getting your UTR number:
Proving Incorrect Information: make sure that the information you provide to HMRC is accurate and up to date, otherwise, they may not be able to process your application.
Tax fraud concerns: One of the critical works of HMRC is preventing fraud. And if they find out you’re getting involved in some kind of tax fraud, they will not issue a UTR number to you.
Non-compliance with tax laws: If you have been previously unable to comply with the tax laws of the country, it can also get in your way to have a UTR number.
And, non-residency: To apply for a UTR number you must be a resident of the UK, otherwise it will be the biggest obstacle to getting a UTR number.
The Bottom Line
In closing, getting a UTR number in the UK is not a complex task as long as you’re following the guidelines established by the central authorities. This is an important tool of communication with HMRC or for filing taxes. This is why, it is also essential to keep this number safe and use it wisely to ensure that your tax-related matters are carried out efficiently.
