Your new employee gives you form P45 – Frequently Asked Questions

Need more help?

If you have any other questions about starting the tax year which have not been covered you can get more help by calling the Employer Helpline on 0845 7 143 143, or you can send an email and we will reply within 2 working days.

Q. How do I send a P45 online?

A. Before you can file online you need to register with HMRC. Choose PAYE for Employers in the Do it online section.

You can send us form P45 (Part 3) online using third party software or our free Online Return and Forms – PAYE product which is part of our PAYE for Employers service. Or you can get an agent or payroll bureau to do it online for you.

You will find all the information you need on our online filing pages.

My new employee hasn’t given me a P45 what do I do?

A. If a new employee does not have a P45 you and your employee will need to complete a form P46 (PDF 177K). The P46 is the form to tell HMRC about an employee who does not have a P45.

You should send the completed form P46 to your PAYE tax office on the first pay day, but from 6 April 2008 if the employee has ticked either box A or B you do not need to send the form until their earnings reach the lower earning limit. You will find more information about completing form P46 in Helpbook E13 Day to day Payroll – Taking on a new employee.

You can send forms P46 to us online using the Internet. You will find all the information you need on our online filing pages.

Q. What do I do with the P45 my new employee has given me?

A. Your employee should keep Part 1A of the P45 and give you Parts 2 and 3. You can not use the P45 unless you have both these parts. You should retain P45 (Part 2) for your records and send Part 3 to the PAYE tax office.

If you do not have both these parts you should ask your employee to complete form P46 (PDF 44K).
You can also send this information online. You will find all the information you need on our online filing pages.

Q. My employee has brought me two P45s which should I use?

A. If your new employee gives you two P45s you should use the latest P45 (Part 3) or, if the Part 3s show similar dates, use the P45 (Part 3) which shows the highest earnings and/or code. If in doubt contact your PAYE tax office for specific advice.

Q. My new employee has given me a P45. What tax code should I use?

A. The table below shows you which tax code to use. Find the date they left their previous employment in the first column and their start date with you in the second column – then use the tax code listed in the third column.

 

Employee’s date of leaving (item 4 on P45)

Employee’s start date with you

Tax code to use

On or after 7 September 2008

On or after 7 September 2008

Use the code on the P45

6 April 2008 to
6 September 2008

6 April 2008 to
6 September 2008

Use the code on the P45

6 April 2008 to
6 September 2008

On or after 7 September 2008

Use the code on the P45, but add 60 to any code ending in L

6 April 2007 to 5 April 2008

6 April 2008 to 24 May 2008

Use the code on the P45, but add 21 to any code ending in L. Do not carry forward any week 1/month 1

6 April 2007 to 5 April 2008

25 May 2008 to 6 September 2008

Use code 543L on a week 1/month 1 basis

6 April 2007 to 5 April 2008

On or after 7 September 2008

Emergency code 603L on a week 1/month 1 basis

Before 6 April 2007

6 April 2008 to 6 September 2008

Use code 543L on a week 1/month 1 basis

Before 6 April 2007

On or after 7 September 2008

Emergency code 603L on a week 1/month 1 basis

Q. My employee has been working for me for several weeks and has now handed me a P45, what should I do?

A. If you have not yet received form P6 from your PAYE tax office you can use the code on the P45 providing it is for the current tax year. If the code is cumulative you must add the previous pay and tax details from the P45 to your records.

If you have already received form P6 you can destroy the P45.

Q. An employee has given me a P45 with a Leaving Date of a few months ago. The first pay has generated a large refund of tax. Is this correct?

A. You must check that the tax figures on the P45 are correct.

You can do this by using the

If the tax figures are correct then it is likely that a tax rebate will be due as the employee has had a few months where they have not used their tax allowances.

Making tax refunds to employees – find out more

Q. What if the Leaving Date doesn’t match up with the week or month number?

A. The leaving date can be different to the week or month number as the employee may not always be paid on the date they leave e.g. they may be paid in arrears.

Check the tax figures using the taxable pay tables or the P45 Checker in the Calculator section of the Employer CD-ROM concentrating on the week or month number given and if correct, use the figures provided.

Q. I am due to make a payment to my new employee in the same period as their previous employer. What figures do I use?

A. Depending on the pay frequency operated by you and a previous employer, a new employee joining you may sometimes receive two wages in one pay period.

If the employee has already received tax free allowances up to and including the week/month number shown on the P45 from the previous employer, paying this employee for the same pay period may result in them paying more tax.

This is because they have already used their tax free allowances for this period with their previous employer and this is perfectly normal.