UTR (Unique Tax Reference Number) is a unique number, comprising 10 digits which is only issued for individuals working as Self-Employed in the UK.
The UTR is issued by the HMRC (Her Majesty’s Revenue and Customs) for all taxpayers registered as self-employed.
At the end of the tax year (5th of April), using your UTR, you need to declare the income gained during the year by filling in the self-assessment form. An accounting calculation based on your income-expenses will be made in order to establish whether or not you are eligible for a tax return or if you need to pay tax.
It is important to have a UTR because it is requested by most of employers in the construction domain or by recruitment agencies in the UK. The employers and agencies use the UTR/CIS to pay taxes on your behalf.
In case you do not have a UTR, 30% of your total income will be deducted instead of 20%.
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