What to do when an employee leaves

Contents

Which forms you have to complete

Form P11

Enter the date of leaving in Box I 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 visit the PAYE Software Forms pages.

  • 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) and retain for 3 years, or longer if you are asked to do so, as these forms must be made available for inspection by us if required.
  • 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 ‘Continue 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.

 

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 has been sick in the eight weeks before they leave you

If the employee has been sick in the eight weeks before they leave you, issue form SSP1(L), leaver’s statement or your own version of the form, only if:

  • your employee asks you to, and
  • SSP was payable for at least one week in the eight weeks before the date they finished working for you.

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 What to do if your employee is sick.

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 1g and include it in column 2 on the P11.

For further information see the Employer Helpbook E15 Pay and time off work for parents.

Employee receiving SPP

If you have already started paying SPP and your employee leaves you must carry on paying for the two weeks they are entitled to. Record the SPP in column 1h and include it in column 2 on the P11.

For further information see the Employer Helpbook E15, Pay and time off work for parents if your employee is entitled to SPP because a baby was born. See the Employer Helpbook E16, Pay and time off work for adoptive parents if your employee is entitled to SPP because a child is being 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 1i and include it in column 2 on the P11.

For further information see the Employer Helpbook E16 Pay and time off work for adoptive parents.

Form P45 lost or incorrect

If a former employee loses their P45 or you find out later you have made a mistake, tell the former employee to contact their HM Revenue & Customs office immediately.

You must never complete a further form 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 Employer Further Guide to PAYE and NICs, 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.