We used bubblegum breeding tags. We are planning to go for the same colour each year but we have a very small flock (4 lambs last year), and our sheep are all very friendly so we have no trouble reading the tags. We went for blue this year for readability, we have some sheep with pink and green (bought in starter flock).
I'm pretty sure we put the tags in the right way but our flock number is on the inside which makes the individual number easier to read. The bought in sheep had the flock number on the outside so you had to get them to look at you or turn the ear slightly to see who was who.
Dans