The P45 form is an essential document in the UK that details an employee's salary and taxes paid up until their leaving date. This form, which is comprised of three parts, serves multiple purposes, including facilitating the accurate taxation of any future employment and ensuring that the departing individual's tax affairs are in order. For employees leaving their job, swiftly and accurately filling out and submitting the form is crucial for ensuring their tax status is updated and to avoid potential issues with future employment. Don't hesitate to take the next step and streamline this process by clicking the button below.
In the realm of employment transitions within the United Kingdom, the P45 form stands as a critical document, encapsulating key financial details when an individual ceases to be employed by an organization. This comprehensive document, issued by HM Revenue & Customs (HMRC), is instrumental in ensuring the smooth continuation of an individual's tax affairs. It is divided into multiple parts, each serving a distinct purpose and designated recipient, from HMRC to the employee and the new employer, if applicable. Each section meticulously records details such as the employee's National Insurance number, tax code, total pay, and tax paid to date, along with deductions such as those for student loans. Of importance is the correct completion of the form, following specified guidelines to avoid tax discrepancies. The P45 form not only facilitates the correct tax calculation for the remaining fiscal year but also serves as a proof of earnings and taxes paid by the departing employee. Instructions within the form guide both employers in their submission responsibilities and departing employees on the steps to follow, notably in safeguarding parts of the form for future tax returns, job applications, or claims for tax refunds. Such meticulous record-keeping is essential for maintaining accurate tax records, highlighting the significance of the P45 in the broader narrative of employment and tax administration in the UK.
P45 Part 1
Details of employee leaving work
Copy for HM Revenue & Customs
File your employee's P45 online at www.hmrc.gov.uk
Use capital letters when completing this form
Employer PAYE reference
Student Loan deductions
1
5
Office number
Reference number
Enter 'Y' if Student Loan deduction is due to be made
/
Tax Code at leaving date
6
2
Employee's National Insurance number
If week 1 or month 1 applies, enter 'X' in the box below.
Title – enter MR, MRS, MISS, MS
or other title
3
Week 1/Month 1
Last entries on P11 Deductions Working Sheet.
7
Surname or family name
Complete only if Tax Code is cumulative. Make no entry
if week 1 or month 1 applies, go straight to box 8.
Week number
Month number
First or given name(s)
Total pay to date
£
•
4
Leaving date DD MM YYYY
Total tax to date
Employee’s private address
8
This employment pay and tax. Leave blank if the Tax Code
12
is cumulative and the amounts are the same as box 7.
Total pay in this employment
Total tax in this employment
Postcode
Works number/Payroll number and Department or branch
9
(if any)
13
I certify that the details entered in items 1 to 11 on
this form are correct.
Employer name and address
Gender. Enter ‘X’ in the appropriate box
10
Male
Female
Date of birth DD MM YYYY
11
Date DD MM YYYY
When an employee dies. If the employee has died
14
enter 'D' in the box and send all four parts of this
form to your HMRC office immediately.
Instructions for the employer
•Complete this form following the 'What to do when an employee leaves' instructions in the Employer Helpbook E13 Day-to-day payroll. Make sure the details are clear on all four parts of this form and that your name and address is shown on Parts 1 and 1A.
•Send Part 1 to your HM Revenue & Customs office immediately.
•Hand Parts 1A, 2 and 3 to your employee when they leave.
P45(Manual) Part 1
HMRC 04/08
P45 Part 1A
Copy for employee
Student Loan deductions to continue
Complete only if Tax Code is cumulative. If there is an ‘X’
at box 6 there will be no entries here.
This employment pay and tax. If no entry here, the amounts
are those shown at box 7.
To the employee
The P45 is in three parts. Please keep this part (Part 1A) safe. Copies are not available. You might need the information in Part 1A to fill in a Tax Return if you are sent one.
Please read the notes in Part 2 that accompany Part 1A. The notes give some important information about what you should do next and what you should do with Parts 2 and 3 of this form.
Tax credits
Tax credits are flexible. They adapt to changes in your life, such as leaving a job. If you need to let us know about a change in your income, phone 0845 300 3900.
To the new employer
If your new employee gives you this Part 1A, please return it to them. Deal with Parts 2 and 3 as normal.
P45(Manual) Part 1A
P45 Part 2 Details of employee leaving work
Copy for new employer
Office number Reference number
Title - enter MR, MRS, MISS, MS or other title
5Student Loan deductions
6Tax Code at leaving date
If week 1 or month 1 applies, enter 'X' in the box below. Week 1/Month 1
7Last entries on P11 Deductions Working Sheet. Complete only if Tax Code is cumulative. If there is an ‘X’ at box 6, there will be no entries here.
£ •
This form is important to you. Take good care of it and keep it safe. Copies are not available. Please keep
Parts 2 and 3 of the form together and do not alter them in any way.
Going to a new job
Claiming Jobseeker's Allowance or
Employment and Support Allowance (ESA)
Take this form to your Jobcentre Plus office. They will pay you any tax refund you may be entitled to when your claim ends, or at 5 April if this is earlier.
Give Parts 2 and 3 of this form to your new employer, or you will have tax deducted using the emergency code and may pay too much tax. If you do not want your new employer to know the details on this form, send it to your HM Revenue & Customs (HMRC) office immediately with a letter saying so and giving the name and address of your new employer. HMRC can make special arrangements, but you may pay too much tax for a while as a result of this.
Going abroad
Not working and not claiming Jobseeker's Allowance or Employment and Support Allowance (ESA)
If you have paid tax and wish to claim a refund ask for form P50 Claiming Tax back when you have stopped working from any HMRC office or Enquiry Centre.
Help
If you need further help you can contact any HMRC office or Enquiry Centre. You can find us in The Phone Book under HM Revenue & Customs or go to www.hmrc.gov.uk
If you are going abroad or returning to a country
outside the UK ask for form P85 Leaving the United Kingdom from any HMRC office or Enquiry Centre.
Becoming self-employed
You must register with HMRC within three months of becoming self-employed or you could incur a penalty. To register as newly self-employed see The Phone Book under HM Revenue & Customs or go to www.hmrc.gov.uk
to get a copy of the booklet SE1 Are you thinking of working for yourself?
Check this form and complete boxes 8 to 18 in Part 3 and prepare a form P11 Deductions Working Sheet. Follow the instructions in the Employer Helpbook E13 Day-to-day payroll, for how to prepare a P11 Deductions Working Sheet. Send Part 3 of this form to your HMRC office immediately. Keep Part 2.
P45(Manual) Part 2
P45 Part 3
New employee details
For completion by new employer
Title – enter MR, MRS, MISS, MS or other title
at box 6, there will be no entries here.
To the new employer Complete boxes 8 to 18 and send P45 Part 3 only to your HMRC office immediately.
New employer PAYE reference
15
Employee's private address
9Date new employment started DD MM YYYY
10Works number/Payroll number and Department or branch (if any)
11Enter 'P' here if employee will not be paid by you between the date employment began and the next 5 April.
12Enter Tax Code in use if different to the Tax Code at box 6
13If the tax figure you are entering on P11 Deductions Working Sheet differs from box 7 (see the E13 Employer Helpbook Day-to-day payroll) please enter the
figure here.
14New employee's job title or job description
16Gender. Enter ‘X’ in the appropriate box
17Date of birth DD MM YYYY
Declaration
18I have prepared a P11 Deductions Working Sheet in accordance with the details above.
P45(Manual) Part 3
Filling out the P45 form accurately is essential whenever an employee leaves their job. This document is critical for ensuring that the employee's tax situation is handled correctly and that they receive any tax refund they might be entitled to. Each part of the P45 serves a different purpose and needs to be distributed accordingly. Here’s a step-by-step guide to help employers fill out the form correctly.
Once the form is filled out, send Part 1 to your HMRC office immediately. Provide the employee with Parts 1A, 2, and 3. Employers need to ensure that all details are legible across all parts of the form and denote their name and address on Parts 1 and 1A. Properly completing and distributing the P45 form is vital for both the employee's and employer's tax records and compliance.
A P45 form is a document an employer gives to an employee when they leave their job. It provides details about the employee's salary and the tax that has been paid on their earnings during the tax year. The form is divided into four parts, each serving a specific purpose for different recipients: HM Revenue & Customs (HMRC), the employee, and a new employer if applicable.
The responsibility to complete a P45 form lies with the employer. When an employee leaves their job, the employer should complete the form using the earnings and tax information up to the employee's leaving date.
When starting a new job, you should give parts 2 and 3 of the P45 form to your new employer. This helps your new employer use the correct tax code and ensures that the tax you pay is accurate. If you do not have a P45 form, your new employer may put you on an emergency tax code until they receive the correct information.
If you don't receive a P45 from your previous employer, you should contact them and request it. If you're unable to obtain your P45, inform your new employer so they can make the necessary arrangements to ensure you're taxed correctly.
No, copies of the P45 are not available. It's important to keep your P45 safe, especially Part 1A, which is for your records. If you lose your P45, inform your new employer or the Jobcentre if you're claiming benefits. They will advise you on the next steps.
The information on your P45 form helps to ensure you're on the correct tax code and that you pay the right amount of tax. It includes details of your earnings and the tax paid in the tax year up to your leaving date from your last job. This information is used by your new employer or if you're claiming Jobseeker's Allowance, to make sure you don't overpay or underpay tax.
Yes, the structure of the P45 form is the same for everyone. However, the details it contains, such as earnings and tax paid, are specific to each individual's employment circumstances.
If you're leaving the UK, you should still receive a P45 form when you leave your job. Additionally, you may need to fill out form P85 and send it to HMRC to let them know you're moving abroad. The P85 form helps HMRC process any tax refund you may be owed.
If you become self-employed after receiving a P45, you must register as self-employed with HMRC within three months. While your P45 is primarily related to your employment under an employer, moving to self-employment means you'll have different tax obligations, and registering lets HMRC know about your change in status.
When filling out the P45 form, individuals often encounter several common pitfalls that can lead to inaccuracies or delays. Understanding these errors can help ensure that the process is completed smoothly and efficiently.
Not using capital letters: The form explicitly requests that information be provided in capital letters, yet it's a common mistake to overlook this instruction, leading to potential processing delays.
Incorrect entries for student loan deductions: A specific indication is required regarding whether a student loan deduction is due ('Y' if yes). Failing to correctly indicate this can affect the accuracy of financial records.
Leaving the tax code and pay details sections incomplete: If applicable, the tax code at the leaving date must be entered, and total pay to date along with total tax to date should not be left blank unless instructed by the form guidelines.
Mistakes in entering the leaving date: Incorrectly formatted dates (DD MM YYYY) or inaccurate leaving dates can cause administrative issues or delays in the processing of the P45.
Forgetting to mark the 'Week 1/Month 1' box when appropriate: This is crucial for indicating the tax code operation and must be accurately filled in to ensure correct tax calculations.
Not certifying the form: The form requires a declaration that the information provided is accurate. Failing to certify or sign where necessary can render the form invalid.
Below are additional points that are important but less commonly mistaken:
When an employee leaves their job, various documents beyond the P45 form are often required to manage their departure and ensure a smooth transition. These documents can range from tax forms to personal records, each serving a specific function in the process of leaving an employment or starting a new one.
Together with the P45, these documents ensure that all aspects of an employee's taxation, social security, and personal record-keeping are properly managed during transitions between jobs or other significant life events. The careful handling of these documents benefits both employers and employees, ensuring legal compliance and the accurate calculation of taxes and benefits.
The W-2 Form in the United States is similar to the P45 in that it provides details about an employee's earnings and tax deductions for the year. Both documents are essential for tax filing purposes, summarizing the financial relationship between employer and employee during the fiscal period.
Australia's Payment Summary (also known as the Group Certificate) mirrors the function of the P45, giving a summary of the pay received from an employer and the taxes withheld. This similarity highlights the universal need for employees to report their income accurately to their respective tax authorities.
The T4 Slip in Canada shares a similar purpose with the P45 by detailing an individual's earned income and taxes paid over the tax year. This ensures both Canadian and UK employees have the correct documentation to support their tax returns.
New Zealand's IR345 Employer Monthly Schedule serves a parallel function by summarizing employees' earnings and tax deductions, akin to the P45. Although the IR345 is submitted monthly, it contributes to the annual account of payroll deductions similar to the summary provided by the P45 when leaving a job.
Germany's Lohnsteuerbescheinigung (Wage Tax Statement) is another counterpart, detailing annual wage and tax information for employees. Like the P45, it's a critical document for accurately completing an individual's tax return, ensuring all income and taxes are accounted for.
When handling the P45 Form in the UK, especially when you're the one responsible for completing or submitting it, there are several vital do's and don'ts to keep in mind. These tips will ensure the process is smooth for both the employer and employee, and that accurate records are kept for HM Revenue & Customs (HMRC).
Do's:
Don'ts:
Understanding the P45 form is crucial for both employers and employees in the UK. However, there are several misconceptions regarding its purpose and use. Clarifying these misconceptions ensures smoother transitions for employees leaving a job and helps maintain compliance with HM Revenue & Customs (HMRC) regulations.
Many people believe that the P45 is strictly a document for tax purposes. While Part 1 of the form is sent to HMRC, Parts 1A, 2, and 3 play critical roles for the employee, the former employer, and the new employer, respectively. These sections ensure the correct tax code is used, potentially avoiding overpayment of tax by the employee in their new job.
Once an employee leaves a job, they receive one original set of the P45 form which comprises Parts 1A, 2, and 3. Contrary to what some believe, copies of this document cannot be reissued if lost. It's the responsibility of the employee to keep these parts safe as they contain vital information for tax purposes and future employment.
While the P45 form provides essential information for setting an employee's tax code correctly in a new job, it's not the sole document required. Employers might also need additional forms, such as the P46, if an employee doesn't have a P45, or specific forms relevant to employee benefits and allowances.
This is not entirely accurate. Transitioning from employment to self-employment still requires managing one's tax affairs efficiently. The information on the P45 can be crucial for completing a self-assessment tax return accurately, reflecting one's income and tax paid while they were employed within the fiscal year.
Clearing up these misunderstandings about the P45 form is essential for everyone in the workforce. Whether you're an employer managing employee transitions or an employee moving on to a new challenge, understanding the importance and correct use of the P45 form is beneficial. This knowledge facilitates a smoother transition between jobs, ensuring employees are taxed correctly in their new roles and comply with HMRC requirements.
Understanding and properly filling out the P45 form is crucial for both employers and employees when employment comes to an end. Here are five key takeaways to ensure the process is handled correctly:
In summary, the P45 form is a critical document in the UK's tax system, ensuring smooth transitions between jobs and accurate tax processing. Both employers and employees must give it the attention it requires to avoid complications.
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