What to do when an employee leaves
Contents
Which forms you have to complete
Form P11
Enter the date of leaving in Box J on the page of the P11 that you are using.
If you have used the P11 Calculator on your Employer CD-ROM you must enter the leaving date in the Employer Database.
Form P45
Form P45 is available to send online. For more information see the 'Do it online', or go to Doing PAYE online all year round.
Fill in a form P45:
- even if the employee says they will not be working when they leave you
- for any employee leaving for whom you have completed a form P11.
Do not fill in a form P45:
- when the employee is a student who, because of the P38(S) procedure, has not had tax deducted. Instead complete the 'Employer’s statement' on form P38(S) or equivalent records. Retain for three years, or longer if you are asked to do so, as these forms must be made available for inspection by us if required.
- If you are paying a pension to a retiring employee, please refer to the notes for further information.
When filling in a form P45:
- make sure you use a four-part version
- use capitals, and
- make sure all parts are legible.
If you have been told to make Student Loan deductions:
- enter a ‘Y’ in Box 5 headed ‘ Student Loan deductions’ of the form P45. However, if you have received a Stop notification for this employee do not enter ‘Y’ in the box
- give Parts 1A, 2 and 3 of form P45 to your employee when they leave
- send Part 1 to your HM Revenue & Customs office immediately.
Example of a completed form P45
When filling in a paper form P45 make sure you use a four-part version, use capitals and make sure all parts are legible.
If you have used the P11 Calculator on your Employer CD-ROM, when an employee leaves your employment and you have made a final payment you must enter the leaving date in the Employer Database. To complete the P45 view the ‘In Year Leaver Summary’ on the P11 Calculator to find the entries you need to make on the P45.
Other points to note
Employee pays reduced rate NICs
If the employee is a woman who has been paying the reduced rate of employee’s NICs (for example, contribution Table letter B, E or G) complete the form CA4139 (CF383) or CF380A with the information requested on the form and return it to her.
Employee receiving SSP and still sick
If the employee is receiving SSP and is still sick when they leave:
- return any original medical evidence that continues after the date they leave, to the employee, keeping a copy for your own records
- issue form SSP1, or your own version of the form, so that the employee can claim benefit.
If we find that you have dismissed an employee to avoid paying SSP we can decide that you are still liable to pay SSP as if the contract had continued.
For further information see the Employer Helpbook E14 Statutory Sick Pay (PDF 270K).
Employee receiving SMP
Your liability to pay SMP does not end when your employee leaves. You must continue to pay her the SMP until the end of the Maternity Pay Period, and to record the SMP in column 1h and include it in column 2 on the P11.
For further information see the Employer Helpbook E15 Statutory Maternity Pay (PDF 202K).
Employee receiving SPP
If you have already started paying SPP and your employee leaves you must carry on paying for the one/two weeks they are entitled to. Record the SPP in column 1i and include it in column 2 on the P11.
For further information see the Employer Helpbook E19 Statutory Paternity Pay (PDF 270K) if your employee is entitled to SPP after a baby was born or the child was adopted.
Employee entitled to or receiving SAP
Your liability to pay SAP does not end when your employee leaves. You must pay them the SAP, and record it in column 1j and include it in column 2 on the P11.
For further information see the Employer Helpbook E16 Statutory Adoption Pay (PDF 202K).
Form P45 lost or incorrect
If a former employee loses their P45 tell them to contact their HM Revenue & Customs office immediately.
If you realise you have issued an incorrect P45, write to your HM Revenue & Customs office with an explanation.
You must never complete a further form P45 or amend a P45.
Payment to a former employee
If you make a payment to a former employee or there is still a payment due to a deceased employee, see the CWG2(2009) Employer Further Guide to PAYE and NICs (PDF 771K), under ‘Employees – leaving’, or ‘Employees – death’.
When you no longer have employees
Tell your HM Revenue & Customs office when:
- you cease in business, or
- you do not expect to employ anyone for one year or more from the start of the next tax year.
If yours is a limited company and you no longer have employees, the HM Revenue & Customs office will ask for special information before deciding whether or not to cancel your PAYE scheme.
