On what basis is the P45 completed where a worker, affected by IR35, leaves employment of the intermediary?
The P45 should show taxable pay to date, including the deemed salary, and
tax deducted, including the tax on the deemed salary. If the P45 is completed
on this basis and handed to the new employer, then the new employer will
deduct the correct amount of tax in relation to any actual salary, or any
deemed payment, in relation to the new employment.
The employee is assessable to tax on both actual and deemed payments, and
so any in-year deemed payments have to be taken into account in the operation
of PAYE. This will not affect the amount of tax and NIC deducted from the
next payment by the new employer.
Once a P45 has been issued it cannot be amended. If additional fees are
received after the P45 has been completed the employer should account for
tax at the basic rate on any additional amount of the IR35 deemed payment
and let the employee know of this.
The procedures for payments after a P45 has been issued are on page 94 of
the Employer's Further
Guide to PAYE and NICs - CWG2 (2000)
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