Members of the British Insurance Brokers’ Association (BIBA) are seeing momentum building among their customers about the need to supply Employer Reference Numbers with collection rates as high as 70 to 100%, according to a survey. The ERN forms a mandatory component for the population of the Employers’ Liability Database which is making it easier for potential claimants to find their former employer’s EL insurer.
The BIBA member survey showed that nearly half (49%) of respondents reported between 70 to 100% collection levels of the ERN which is a business specific number issued by HM Revenue & Customs (HMRC). A further 19% of respondents had a collection rate of between 50% and 70%.
The industry must achieve a 100% success rate in obtaining ERNs by April 2013 or insurers could face penalties from the Financial Services Authority.
Where there are collection problems, lack of awareness of ERN by businesses was identified as the main barrier to collection by 61% of respondents, but 40% also highlighted that businesses did ’not know where to locate’ ERNs.
Steve Foulsham, BIBA’s Head of Technical Services, said: “ELTO has had concerns about success rates so I’m pleased that members are reporting these levels of collection, but further progress is still required. We believe that problems in collection have occurred because of an unwillingness to supply the information at SME and VSME level, due to the alignment of ERNs with the PAYE system. In many ways this could and should be addressed by an education programme driven by HMRC which allocates these numbers.”
All businesses employing one or more staff will have an ERN, but around a third of respondents (35%) highlighted business exemptions as a reason for non-collection. This is a higher figure than expected and requires further investigation by the Employers’ Liability Tracing Office (ELTO).
Foulsham added: “BIBA is fully committed to the success of ELTO, and we will continue to encourage members to ensure that they do not take their foot off the pedal, but we do need support from government, where HMRC do have the information. We would like to see the HMRC data made available to the industry or directly to ELTO. Further education of the business community is also required in order to reiterate why this information is needed, and this could include publicity provided by other trade associations. This was also cited as a barrier to collection by a small number of our survey respondents.”
