Why you will be asked for your PAYE Employer Reference Number (ERN) number by ELTO

Written by Ed Beckmann Monday, 5 December 2011 04:16

What is ELTO, and Why do they need my Employer PAYE reference number?

Today I got an email purportedly from my business insurers, giving a description of the Employer’s Liability Tracing Office (ELTO) and asking for my employer’s reference number (ERN), often termed the PAYE reference. In case you receive such a letter, here is what it means!

Like you, I always check out any correspondence asking me for detail of any kind, and I could not find any references to this at the Federation of Small Businesses (FSB) or Business Link‘s sites.

Briefly, ELTO is an organisation that has been set up voluntarily by the insurance industry to make it easier for people who are injured at work to find their employer’s insurance company to make a claim. They explain in more detail on their website.

They are setting up a database of all organisations who have employer’s liability cover and have chosen to use the employer’s reference number as the key number to find the right business, since names and addresses can all change easily. Now in theory if you bother to pay for employer’s liability you have employees so unless they all receive very low wages, you will have a PAYE or payroll scheme with the Inland Revenue (www.hmrc.gov.uk). The irony is, if you move that reference number may also change!

So in short, it seems that if you get a letter it can be a legitimate request (but of course check the email address that you reply to with your own records of your insurer) and they really do need the number. Of course you could reply to say you have no PAYE scheme if that applies to you.

What happens if you refuse to send ELTO your Employer Reference Number (ERN)?

Reading through the guidance that has been produced for insurance brokers (ELTO_BIBA_Broker_Guide_1011) it says ‘From April 2012, insurers might not provide cover for policies where additional data (including the ERN) has not been provided.’ So pretty clear then – if you do not supply a number then cover might not be provided.

I do not have all of the definitive references for this, but might have saved you a bit of digging!