The P 45 It form serves as a critical document for individuals in the United Kingdom transitioning between jobs. It contains detailed information regarding an employee's departure from their job, including their tax code, final pay, and deductions. Employers are responsible for completing this form and distributing the relevant parts to the departing employee, their new employer, and HM Revenue & Customs (HMRC).
Stepping through the doors of the workforce can bring about its fair share of paperwork, especially when it's time to part ways. Whether an employee is moving to greener pastures, retiring, or any reason in between, the P45 form is one document that takes center stage. This form serves as a record of an employee's departure from a company, summarizing their salary and the taxes paid during their time of employment. It is meticulously designed to ensure HM Revenue & Customs (HMRC) and the employee are well-informed about the details pertinent to the employee's earnings and tax deductions. The form is divided into several parts, with each serving a unique purpose. Part 1 is primarily for HMRC, allowing the employer to report the employee’s departure. Part 1A, on the other hand, remains with the employee, offering a summary of their earnings and taxes paid, which can be particularly handy for future references, such as filling out tax returns. Parts 2 and 3 are designed for the employee's new employer or, if necessary, the Jobcentre Plus, demonstrating the continuous nature of employment records and tax responsibilities. Every section, from the employee's National Insurance number to their final pay and tax details, ensures a smooth transition for both employee and employer, reinforcing the importance of this form in the UK's employment and tax systems.
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
After an employee leaves their job, the P45 form becomes an essential document, capturing their tax details up to the end of their employment. This form details how much tax the employee has paid on their salary so far in the tax year. It is vital for ensuring the employee's tax affairs are in order for their next job, for claiming a tax refund, or for claiming benefits. The form is divided into parts, and each serves a different function, but here, the focus will be on the comprehensive guide to completing the P45 Part 1 for HM Revenue & Customs (HMRC).
Once you complete Part 1 of the P45 form, sending it to HMRC is the next step. Don't forget to hand Parts 1A, 2, and 3 of the P45 form to the departing employee, as they will need these documents for their next employment, to claim a tax refund, or to apply for benefits. It's critical to ensure all information provided is accurate and complete to avoid any complications for both the individual and the business with tax affairs.
What is a P45 form?
A P45 form is a document an employer gives to an employee when they leave a job. It contains important information such as the employee's earnings and the amount of tax that has been deducted during the employment period.
Why is the P45 form important?
The P45 is crucial for ensuring the employee is taxed correctly in their new job or when claiming state benefits. It helps the new employer understand the employee's previous tax situation.
What information does a P45 include?
A P45 includes details such as the employee's name, National Insurance number, earnings, and how much tax has been paid. It also includes the employer's pay as you earn (PAYE) reference, the employee's tax code, and any student loan deductions.
What if I lose my P45?
If you lose your P45, you should inform your new employer or the Jobcentre if you're claiming unemployment benefits. They can contact HM Revenue and Customs (HMRC) for the necessary information, but it may take longer to get your tax code correct.
How many parts does the P45 form have and what should I do with them?
The P45 form is divided into four parts. Part 1 is sent by the employer to HMRC, and Parts 1A, 2, and 3 are given to the employee. The employee keeps Part 1A for their records and gives Parts 2 and 3 to their new employer or to the Jobcentre if they're claiming specific benefits.
Can I file my P45 online?
Employers can file the P45 information online with HMRC. However, employees cannot submit their P45 form online themselves. They must hand the physical copies of Parts 2 and 3 to their new employer.
What if I don't have a new job to go to?
If you do not have a new job, you should still keep your P45 safe. Parts 2 and 3 will be needed if you claim Jobseeker's Allowance or if you start a new job in the future. If you're not going to work or claim benefits, you may be entitled to a tax refund and should contact HMRC.
How do I claim a tax refund with my P45?
If you believe you're owed a tax refund upon leaving your job, you should submit your P45 Part 2 and 3 to HMRC along with a claim for a tax refund. The information on your P45 will help HMRC determine if you've overpaid tax and are eligible for a refund.
Not using capital letters where required: The form instructs that capital letters should be used. This can help avoid misinterpretation of the information provided.
Incorrectly indicating Student Loan deductions: A common mistake is not properly indicating whether a Student Loan deduction is due. This is crucial for proper tax calculation.
Entering the wrong tax code at the leaving date: Tax codes should be accurately reported to ensure correct tax processing.
Failing to accurately detail the employee’s National Insurance number: This is a unique identifier and is critical for correctly logging the employee’s tax and National Insurance contributions.
Skipping the Week 1/Month 1 marker if applicable: Not marking 'X' when Week 1 or Month 1 applies can lead to incorrect tax adjustments.
Leaving fields blank when information should be provided: For instance, failing to provide total pay to date or total tax to date when the Tax Code is cumulative can result in inaccuracies.
Forgetting to certify that the details entered are correct: The employer’s certification is a crucial step for the validity of the form, and forgetting it can result in the form being returned or not processed.
To ensure the P45 form is completed accurately and effectively, both employers and employees should review all entries carefully and comply with the specific instructions provided for each section of the form.
When processing documentation for employees leaving their jobs or starting new employment, the P45 form plays a crucial role. However, it's not the only document that individuals and employers may need to handle during these transitions. Understanding the additional forms and documents often used can provide a smoother experience for both parties involved.
To conclude, while the P45 form is critical during employment transitions, being aware of and prepared with other relevant forms and documents can significantly impact the efficiency of these processes. It's beneficial for both employees and employers to familiarize themselves with these documents to ensure compliance and peace of mind during transitional times.
The W-2 form in the United States serves a purpose similar to the P45 It form in the UK, as both provide crucial tax information related to an individual's employment. The W-2 form reports an employee's annual wages and the amount of taxes withheld from their paycheck, akin to how the P45 details the income and taxes paid till the leaving date. This information is pivotal for accurately filing tax returns, ensuring that both the employee and the tax authorities have the necessary records for tax assessment.
Similar to the P45 form, the W-4 form in the U.S. is used by employees to declare their tax situation to their employer, although it serves a slightly different purpose. While the P45 is issued when an employee leaves a job, reflecting past earnings and taxes, the W-4 is completed at the start of employment to determine the amount of tax to be withheld from the employee's paycheck. Both forms are crucial in ensuring the correct tax amount is deducted from the employee's earnings.
The I-9 form in the United States, while primarily used for verifying the identity and employment authorization of individuals hired for employment, indirectly shares a commonality with the UK's P45 form in the broader spectrum of employment documentation. Both forms are obligatory steps in the employment process, ensuring compliance with legal requirements — the P45 for tax purposes and the I-9 to verify eligibility to work.
The 1099 form in the United States is akin to the P45 in that it deals with tax matters related to employment, but it caters to a different audience. Independent contractors and freelancers receive a 1099 form from each client for whom they've conducted work, detailing the income they've earned. While the P45 is for employees leaving a traditional employment role, both documents similarly inform tax authorities of income earned to properly assess taxes due.
The P60 form, found in the UK, serves as a complement to the P45. While the P45 is given to employees when they leave their job, summarizing their tax deductions and earnings for the year, the P60 is provided to employees at the end of the tax year while still employed. Both documents are essential for the employee to manage personal tax affairs, such as claiming refunds or dealing with underpayments.
The Unemployment Benefit form, or the claim for unemployment insurance benefits in the U.S., shares a fundamental purpose with aspects of the P45 related to job cessation. When an individual becomes unemployed, this form helps them to claim unemployment benefits, relying on previously reported earnings (similar information as contained in the P45) to determine their eligibility and benefit amount. Both forms play a vital role in supporting individuals during transitions in their employment status.
The P11D form in the UK, which details benefits in kind and other non-salary benefits provided to employees, shares a complementary relation to the information captured in the P45. While the P45 records salary and tax paid until an employee's departure, the P11D covers the valuation of received benefits not included in the salary. Both forms together offer a comprehensive view of an employee's compensation and tax liabilities.
Last, the P45's semblance to the New Hire Reporting form in the United States underscores the importance of reporting employment changes for tax and legal compliance. The New Hire Reporting form mandates employers to report newly hired or rehired employees, facilitating child support enforcement. Though serving different segments of employment lifecycle management, both documents ensure governance adherence, reflecting changes in employment for personal and statutory record-keeping.
When dealing with the completion and processing of the P45 form, it is crucial to adhere to specific guidelines to ensure accuracy and compliance with HM Revenue & Customs (HMRC) requirements. Below are essential dos and don'ts to keep in mind:
Things You Should Do
Utilize capital letters to fill out the form, ensuring clarity and reducing the risk of errors in processing.
Enter the correct Employee National Insurance number, as it is a critical piece of information for tracking an individual’s HMRC records.
Be meticulous when entering pay and tax details, providing accurate figures for total pay to date and total tax to date to prevent discrepancies.
Clearly indicate if a week 1 or month 1 tax code applies by marking 'X' in the specified box, which ensures correct tax treatment.
For employees leaving work, remember to hand Parts 1A, 2, and 3 of the form to the employee as specified, keeping in line with HMRC guidelines.
Send Part 1 of the P45 to your HMRC office immediately after completion, adhering to HMRC’s submission timelines.
Things You Shouldn't Do
Do not leave critical fields incomplete, such as the employee's leaving date or their last pay and tax information, as these details are necessary for HMRC processes.
Avoid making assumptions about the employee's tax code or student loan deductions without proper evidence or confirmation.
Do not forget to indicate the employee's gender and date of birth, as missing personal details can lead to complications in their records.
Refrain from guessing the information; if unsure, verify details such as PAYE reference numbers or tax codes directly from previous records or with HMRC to avoid inaccuracies.
Do not withhold the P45 parts from an employee who is leaving; it is their right to have these documents for their records and future employment.
Avoid delaying the submission of the P45 parts to HMRC and the employee; timely distribution is crucial for smooth transitions and tax processing.
Understanding the P45 form can be challenging, especially when there are many misconceptions surrounding its purpose and the information it contains. Let's clarify some common misunderstandings to ensure accurate handling and interpretation of the form.
It's only for the employer's records: Many people believe that the P45 is solely for the use of the employer. However, the form serves multiple parties. While Part 1 is sent to HM Revenue & Customs (HMRC) by the employer, Parts 1A, 2, and 3 are given to the employee. The employee will need these when starting a new job or claiming state benefits to ensure they are taxed correctly in the future.
It's a simple payroll document: Some may underestimate the importance of the P45, considering it just another piece of payroll paperwork. It is actually a crucial document that summarizes an employee's pay and tax details up until their leaving date. This information is essential for correctly calculating tax in a new job or when claiming certain benefits.
The information is automatically updated: There is a misconception that once the P45 is issued, it gets automatically updated with any new employment details. The truth is, the P45 is a final statement of your earnings and tax deductions with a specific employer. Any new employment details would go on a new P45 or be incorporated into the tax code adjustments in your subsequent job.
Student Loan deductions are not indicated: It's incorrectly assumed that the P45 form doesn't mention anything about Student Loan deductions. However, the form has specific sections (boxes 5 and 6 on Parts 1 and Part 2) where employers should enter whether a Student Loan deduction is being made. This is vital for maintaining the correct continuation of these deductions in new employment.
You only need to keep Part 1A: While Part 1A of the P45 is indeed for the employee's personal records, retaining Parts 2 and 3 is also essential. When beginning new employment or claiming jobseeker's benefits, handing over these parts to the new employer or Jobcentre Plus is necessary to ensure correct tax treatment.
If you lose it, you can easily get a copy: A common misunderstanding is that obtaining a duplicate of the P45 is straightforward. In reality, employers can't issue duplicate P45 forms. If an employee loses their P45, the new employer or benefits office can use the employee's details to manually update their records. Still, it complicates the process.
It includes details of your total earnings for the tax year: The assumption that the P45 contains information about an employee's total earnings for the tax year is misplaced. The P45 only shows the earnings and tax paid up until the employee left that particular employer. For a complete picture of your annual earnings and tax, a P60 form or personal tax account overview would be necessary.
Correcting these misconceptions ensures that both employers and employees treat the P45 with the care and attention it requires. This attention to detail supports smoother transitions between jobs and a more accurate tax system overall.
The P45 form is a critical document in the United Kingdom that details an employee's departure from a job. Here are eight key takeaways about filling out and utilizing the P45 form:
Filling out the P45 form accurately and comprehensively is vital for both employers and employees. It ensures that employees are taxed correctly in their new employment and that any due refunds are processed efficiently. For employers, it is part of their legal duties in managing payroll and tax obligations properly.
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