What is Unique Taxpayer Reference (UTR), and How Does it Work?

Ryan Patrick

• 5 min read
What is Unique Taxpayer Reference (UTR), and How Does it Work?

The UTR number is a unique 10-digit number that your company must have as a UK taxpayer. The His Majesty Revenue and Customs (HMRC) uses UTR when identifying you or your business when dealing with your tax. So, whether in a partnership, an individual, a company, or a self-employed, you need this number to file a self-assessment tax return.

Although the primary reason to get UTR is for self-assessment tax purposes, you can also use it for other reasons like construction industry schemes and working with financial advisors. In this blog, we'll dive into the steps and process of getting the UTR number and how it works.

Who Can Apply for UTR?

The UTR number is for people and entities in the UK who have tax obligations or interact with HMRC for tax-related issues. These are examples of individuals and entities that need UTR numbers.

  • Self-employed people: if you are self-employed, such as consultants, contractors, freelancers, or sole traders, and must file for tax, you need UTR.
  • Limited companies: if your company is incorporated in the UK, whether a public limited company, private limited company, or a foreign company with a United Kingdom branch, it needs a UTR number.
  • Partnership: a business entity formed by two or more parties that need a UTR. Additionally, each partner in the partnership needs a personal UTR.
  • Trusts and estates: every trust and estate with a tax obligation or generates income, including deceased estates, non-discretionary and discretionary, requires a UTR.
  • Non-profit organizations: non-profit organizations and charities with tax obligations like filing annual tax returns require the UTR number.

Steps to Getting a UTR Number

  1. The fastest way to get the UTR is by registering as self-employed online. Registering for self-assessment is easy; go to HRMC's website or fill out the form online, then go to HMRC via post.
  2. You can also reach HMRC through 0300 200 3310 and inquire about your UTR. They will ask you about your national insurance number and other personal details. Then, they will direct you on how to apply for UTR online as a limited company or self-assessment.
  3. After the registration, HMRC will send you a letter with your UTR code, which can take up to 10 days to reach you if you're in the UK or 21 abroad.
  4. To get your UTR, you should give the following information
  • Your name
  • Date of birth
  • National insurance number
  • Your contact address
  • Phone number
  • Your email address
  • Your business address
  • Your company telephone number
  • The date of your self-employment
  • Your business structure

Note:HMRC expects you to register your company not later than three months after opening your company. After you receive the activation code, use it to register your online tax account. You must use this code within 28 days after it expires.

What Happens When I Lost My UTR Number

Most people misplace original letters with their UTR numbers, but you shouldn't worry about that. You can get the UTR from the previous tax return, payment reminders, or your online HMRC account. However, if you cannot access your online account or find any document from HMRC, contact the Self Assessment helpline; they will help you get your UTR number.

Can I Share My UTR Number?

Similar to a national insurance number, your UTR should be confidential, but in a few circumstances, you can share it. For instance, if an accountant or your financial advisor wants to act on your behalf. They may need it when submitting your tax returns or when contacting HMRC.

Another instance where you can share your UTR is if you're a subcontractor registered for CIS. As a subcontractor, you must be verified by the contractor you work for. The verification process needs your UTR number and other information.

Ways of Protecting UTR Number

Although there are a few scenarios where you need to share your UTR with a third party, you should be cautious because UTR numbers are used to identify theft. So, keep it confidential unless someone asks it for a good reason. Here are ways to protect it.

1. Keep the UTR number confidential

To do this, follow these steps:

  • Don't share your UTR with unauthorized parties
  • Avoid including your UTR in public documents, online platforms, or emails
  • Be cautious when sharing your UTR number over your phone; ensure you are giving it to a legitimate representative

2. Store your UTR in secure storage

These are ways to safeguard your UTR:

  • Keep the hard copies in secure locations such as safe.
  • Store electronic copies in encrypted and password-locked folders or cloud storage.
  • Back up your electronic files regularly to prevent data loss
  • Dispose of tax documents after shredding physical copies and delete electronic files you no longer need.

3. Be alert of phishing attempts:

with the rise of cybercrime, be cautious of fraudulent techniques that third parties may use to obtain sensitive information, such as financial details and UTR. To protect your UTR from phishing attempts, you must

  • Don't click any suspicious links from unknown sources
  • Ensure your PC is protected with the security software that is the latest
  • Verify the legitimacy of communication by contacting the sender's official channel, for example, HMRC's official website.

When you follow these measures, you will keep your UTR confidential.

How do I get UTR for My Startup Limited Company?

When you don't have to contact HMRC after the incorporation of your company, the company house will notify the HMRC. 14 days after forming your company, the HMRC will send a letter to your office address with your company's UTR. The letter will also explain how and when to register for your business taxes.

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Do I Inform HMRC My Company is Active?

When your business starts trading, your UTR should register as active for corporation tax three months after your business was incorporated. You can use the HMRC online registration service. You need government gateway user identification, password, and tour UTR number.

You can also post a letter signed by your company secretary or director with the following information.

  • Your company name and its registration number
  • The address where your business is located
  • The list of names and addresses of your company directors
  • The type of business your company specializes in.
  • Date your company started making sales
  • Date your yearly accounts will be made up to

With this information, HMRC can work out your accounting period for paying your corporation tax and deadlines for delivering your business tax returns. If your business is dormant, inform your local corporation tax office through a letter or phone.

Can I Use My UTR Number as My Business UTR's

HMRC issues your UTR number when you register for self-assessment, which differs from a company's UTR, meaning you won't use personal UTR for your business. After your company application approval, your company becomes a separate legal entity, so it must have its unique UTR.

Conclusion

The unique Taxpayer reference number is vital in identifying people and entities in the United Kingdom with tax obligations. This 10-digit number is essential for self-assessment tax filing and dealing with HMRC. To get UTR, you need to provide your personal information. After the application and approval, it takes around ten days to receive your UTR. Do you have any question on UTR or company formation in the UK? if so, contact Incorpuk for help today.