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What Is a UTR Number? A Guide to UTR Numbers

UTR numbers are an essential part of self-employment and business taxation. If you’re starting your own company in the UK, you’ll need to know what a UTR number is and how these codes can impact your business. This guide covers all you need to know about UTR numbers.

What Is a UTR Number?

A UTR number (unique taxpayer reference number) is a unique 10-digit code assigned to every person paying tax within the United Kingdom. As an entrepreneur, you will use your UTR number to identify yourself when paying self-employment tax.

Do I Need a UTR Number?

A UTR number is a legal requirement of working as a self-employed entrepreneur. Having a UTR number enables you to file your self-assessment tax return. If you are earning income outside of traditional employment contracts (such as PAYE) and don’t have a UTR number, you are liable for prosecution under UK law.

UTR numbers enable HMRC to track and monitor your income for the purpose of taxation, sending you appropriate tax bills based on your self-assessment tax returns.

What If I’ve Started a Limited Company Business?

Many self-employed workers are actually under a salary, paid by the Ltd company they have started. They aren't sole traders and don’t submit self-assessment tax, so how do UTR numbers impact these entrepreneurs?

UK limited companies require their own UTR number for taxation. As with personal UTR numbers, company UTR numbers are unique 10-digit identifier codes. The difference is that instead of applying to your personal taxes, which are paid through the business as PAYE salary, HMRC monitors your financial income and taxes you through the business, rather than directly.

Whether you’re a self-employed sole trader or a business owner starting your own company, you’ll need a UTR to provide details on your income.

How Do I Get a UTR Number?

The acquisition process of a UTR number is straightforward. Once you register for tax — either for self-assessment as a sole trader or by registering your limited company — you’ll be provided with a UTR code by HMRC. Your UTR code will be present in emails sent to you and on official HMRC correspondence. You do not have to do anything specific to obtain your UTR number from HMRC other than simply register your self-employed status. The issuing of UTR numbers is an automated part of starting a business.

You will NOT be issued a UTR number without formal registration with either:

  • HMRC as a self-employed worker
  • Companies House when starting a limited company.

How to Create a Business Plan and Identify the USPs That Set You Apart

Failure to register your business openly through proper channels means you do not obtain a UTR number and so will be operating illegally if you conduct any financial activity — with the following exception:

HMRC expects you to inform them if you start to earn self-employed income within three months of opening your enterprise. You do not need a UTR number to start earning, but you must register for one as soon as possible after the fact.

What Happens If I Don’t Get a UTR Number?

Failure to acquire a UTR number when earning money through self-employment is tax evasion. Failure to acquire a UTR number when earning money through self-employment alongside PAYE earnings also means you’re falsifying your other tax payments, which may be considered as another type of tax fraud.

Tax evasion is a serious crime, which can hold a maximum prison sentence of seven years. For minor accounts, this is unlikely to be the sentence, but the average time in jail for tax evasion is still two years behind bars .

Avoiding tax through failing to obtain a UTR number is not a minor offence and is viewed severely. But what if you’ve only just found out you need a UTR number but have been working self-employed for months already?

Tell HMRC immediately. Willful tax avoidance is a serious criminal offence. Accidental avoidance is often looked upon with leniency, and HMRC will simply backdate your tax payments and may include a late repayment fee. However, this will certainly avoid jail time or hefty criminal penalties.

Other UTR Number Resources

Mint Formations has a collection of UTR number resources. Follow the links below to discover more about UTR numbers:

  • How Do I Find My UTR Number?
  • Can I Change My UTR Number?

Ready to get started, register your company and acquire your UTR number? Mint Formations have a range of company formation packages that can support a smooth startup process.

Want to register your UK limited company today?

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