In this section:
When someone changes jobs, their old employer should give them a form P45. This shows the employee's:
The form has four parts - your new employee should give you Part 2 and Part 3.
On this page:
You first need to check that the figures on it are correct and use the correct figures if they're not.
You'll need to:
If you use payroll software this may do the P45 check for you. If you are using HMRC's P11 Calculator contained within the Basic PAYE Tools package, the check will be done automatically for you when you enter the details of your new employee on the database. If you use a manual payroll you can use:
If you want to use the HMRC free P11 calculator see the section 'Where to get free HMRC's P11 Calculator' later on in this guide.
If you find that the P45 figures are wrong you'll need to enter the correct figures in Part 3 of the P45 (more below) and use these when setting up your employee's form P11 Deduction Working Sheet or equivalent electronic or paper record.
Use the table below to work out what tax code to use. Find the date they left their previous employment in the first column, and their start date with you in the second column - then use the tax code listed in the third column.
Enter this tax code into your payroll software or the P11 Calculator or in box L if you're setting up a paper P11 for the employee.
| Employee's date of leaving (item 4 on P45) | Employee's start date with you | Tax code to use |
|---|---|---|
| 6 April 2012 to 5 April 2013 | On or after 6 April 2012 | Use the tax code on the P45 |
| 6 April 2011 to 5 April 2012 | 6 April 2012 to 24 May 2012 | Use the tax code on the P45, and add 63 to any code ending in L- for example 747L becomes 810L - but do not carry forward any week1/ month 1 markings from the P45 |
| 6 April 2011 to 5 April 2012 | On or after 25 May 2012 | Emergency code 810L on a week 1/month 1 basis |
| Before 6 April 2011 | On or after 6 April 2012 | Emergency code 810L on a week 1/month 1 basis |
To find out more about week one or month one tax codes read the guide 'Understanding employee tax codes' - there's a link below.
The emergency tax code for the tax year 2012-13 is 810L.
Understanding employee tax codes
Rates and thresholds for employers
Almost all employers, regardless of the number of employees, have to file forms P45 online. You must notify HMRC online that the new employee has started with you on or before you make your first payment to the employee.
You can enrol for PAYE Online or read more about the PAYE Online for employer's service by following the links at the end of this section.
If your employee gives you a paper form simply transfer the details to your software package or the downloadable P11 Calculator contained within the Basic PAYE Tools.
When you've checked the details on the P45, fill in boxes 8 to 18 on Part 3 and retain it, along with the Part 2 for at least three years after the end of the tax year to which it relates.
At item 12 make sure you enter the correct tax code. It may not be the same as the one shown on the employee's form P45 - use the table in the earlier section of this guide titled 'Using the right tax code'.
At item 13 make sure you enter the correct tax figure if you found it was wrong during the P45 check.
You'll need your employer PAYE reference number when completing the form. You'll find this on your PAYE paperwork sent when you registered as an employer. Read the guide 'Register as an employer' if you've not yet done this.
Missing National Insurance numbers - HMRC needs to know your employee's National Insurance number so that their National Insurance account can be kept up to date and their entitlement to benefits like the State Pension can be protected.
National Insurance numbers consist of two letters, followed by six numbers, followed by one letter, A, B, C or D. No other format is acceptable. It will look something like this: QQ123456A (this is an example only and should not be used where an employee does not provide their National Insurance number).
You can carry on paying an employee even if you haven't got their National Insurance number - but you must keep a record of their name, address, date of birth and gender - the link below tells you what to do next.
What to do if an employee doesn't have a National Insurance number
File your PAYE in-year forms: P45, P46, etc
Download an example of a completed form P45, Part 2 (PDF 40K)
How to enrol for PAYE Online if you're not able to use the online tax registration service
Registering for PAYE online filing
Once you've filed the P45 online you'll need to prepare a P11 Deductions Working Sheet or equivalent payroll record (electronic or paper) for your employee. You use this to calculate and record the tax, NICs and any student loan deductions due on your employee's earnings.
HMRC strongly recommends that you use software rather than paper records as this will save you time and reduce the likelihood of errors. It will also make it easier to file your PAYE forms online - a significant advantage now that almost all employers are required to file their Employer Annual Return (forms P35 and P14) and starter and leaver information online.
Payroll calculations and records: an introduction
A set of Basic PAYE Tools are now available to download straight to your computer. In addition to the P11 Calculator, the tools include:
If you can't find the information you need about completing a form P45 ask a question through HMRC's email query service
Send an email query about completing form P45
If you still don't know which code to use and you're a new employer or have fewer than three years' payroll experience, call HMRC's New Employer Helpline.
Find contact details for HMRC's New Employer Helpline
Otherwise call HMRC's Employer Helpline - you'll find contact details using the link below.
Find contact details for HMRC's Employer Helpline
Understanding and using PAYE Online for employers
