Find out what information you need to fill in on a P45 and how to process it for both when a new employee joins the company and when a current employee leaves the company.
You have to process a P45 both when a new employee joins your company and when an employee leaves your company. New employee If an employee leaves another job to come to work for you, they should give you a P45 to process. A P45 shows an employee’s:
- National Insurance number
- PAYE tax code
- total pay and tax to the date they left (unless the employee was on a week 1/month 1 tax code in which case this box will be left blank)
(If they do not have a P45, you should give them a P46 form to fill in. To find out how to process a P46, see our Emergency Tax Code article.)
New Employee: Part 1A
Your employee should keep this section as a record of their pay and tax for the last job. If they give you their P45 with part 1A attached, detach Part 1A and give it back to them. New employee: Parts 2 & 3 You need to check the payroll figures on Part 2 are correct. (If your business is less than three years old and you need help with this, call the New Employer Helpline on 0845 60 70 143.) You must file Part 2 for at least three years from the end of the tax year it relates to. You need to fill in boxes 8-18 on Part 3 and send it to HM Revenue & Customs. If you have 50 or more employees you must file your P45 paperwork online. If you have fewer than 50 employees, online filing is optional until 2011 – but from 2011, you must also file your P45 paperwork online. To register to file paperwork online, go to the How to Register for PAYE online on the HM Revenue & Customs website. (The Inland Revenue merged with HM Customs & Excise in 2005 to form HM Revenue and Customs.)
When An Employee Leaves
When an employee leaves your company, whether they hand their notice in, are made redundant or retire, you must provide them with a P45 and update their P11 form. HM Revenue & Customs have more information on how to do this.