Notifying and getting new employee information right

When you take on a new employee, you must get specific information from them and report it to HM Revenue & Customs (HMRC) the first time you pay your new employee.

You must use the right tax code for new employees and report their details to HMRC via a Full Payment Submission (FPS) the first time you pay them. Usually, most of this information is on your new employees' P45 from their previous employer but there may be occasions when the new employee won't be able to give you a P45.

This guide will show you what information you need from your new employee to set them up on your payroll, how to check the details you are given and which information you should use.

On this page:

Information that you'll need from a P45

The information from your new employee's P45 that you must use to set them up on your payroll and report to HMRC correctly is their:

  • full name
  • National Insurance number
  • leaving date from the previous employment
  • tax code (including week 1/month 1, if appropriate)
  • total pay and tax paid to date for the current tax year
  • student loan deduction status (if applicable)

You will also need to report the following for all new employees on their first FPS:

  • date of birth
  • gender
  • full address
  • the date the employment started
  • starter declaration (see tables below)

Make sure the information you get from your new employee is accurate (National Insurance number, full name, gender and date of birth) as this is used by HMRC to match a new employment to the individual’s PAYE record.

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Checking your new employee's previous employment details

If the date of leaving on your new employee's P45 is 6 April 2014 or later

You must check the figures supplied on your new employee's P45.

Whichever method you use, you must:

  • check that items 6 and 7 of Part 3 of the P45 agree with Part 2 - if they don't, contact HMRC's Employer Helpline
  • check the total tax paid to date is correct (item 7 on the P45) if the P45 is for the current tax year
  • make sure that the pay and tax fields are blank if the P45 shows a week 1/month 1 code number

If you use commercial software, it may carry out the checks for you. You can ask your software supplier if you want to make sure. If you use HMRC's Basic PAYE Tools, it will carry out the check for you.

If you find that the figures on your new employee's P45 are incorrect, you should use the correct figures when you set up the new employee's payroll record. If there is a week 1 or month 1 indicator on the P45, you should enter 'nil' as the previous pay and tax details on the employee's payroll record.

If the date of leaving on your new employee's P45 is between 6 April 2013 and 5 April 2014

Disregard the pay and tax figures and report the started declaration as shown in the above table.

If the date of leaving on your new employee's P45 is 5 April 2013 or before

You will need to check that your understanding of their employment situation is correct. You need this information when you tell HMRC about your new employee.

You should ask them to confirm whether:

A. This is their first job since last 6 April and they have not been receiving taxable Jobseeker's Allowance, Employment and Support Allowance, taxable Incapacity Benefit, state pension or occupational pension.

B. This is their only job, but since last 6 April they have had another job, or have received taxable Jobseeker's Allowance, Employment and Support Allowance or taxable Incapacity Benefit. They do not receive state or occupational pension.

C. They have another job or receive a state or occupational pension.

If you don't have a National Insurance number for your new employee

If you don't have a National Insurance number for your new employee, ask them for an old payslip or form P60 - their National Insurance number should be on these. If your new employee can't give you an old payslip or P60, you can send a National Insurance number verification (NVR) request.

This service will probably be part of your payroll software package. Check with your software supplier if you're not sure. HMRC's Basic PAYE Tools allows you to send National Insurance number verification requests.

Please note you cannot send an NVR until you have started to send PAYE information in real time - wait two weeks after sending your first FPS before sending an NVR.

Making sure you use the correct National Insurance number

Student loan repayments

You must also ask your new employee to confirm if they left a course of UK Higher Education before last 6 April and received their first student loan instalment on or after 1 September 1998.

You also need to find out if they have not fully repaid their student loan.

If your new employee says 'yes' to these student loan questions, you must start making student loan deductions from their pay, unless they are repaying a UK student loan by agreement with the UK Student Loans Company to make monthly payments through their bank or building society account.

You can store the information you must gather about your new employee in the format you prefer. HMRC has a Starter Checklist you can use but this form, or any other records you keep, must not be sent to HMRC. You must keep your records for the current and previous three tax years.

Find optional form Starter Checklist

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Seconded employees from abroad

If your new employee comes to work for you from abroad and falls within the definition of a 'seconded employee', you will need to follow a different process when you first pay them. You can find out more about what you need to do if your new employee is a 'seconded employee' by following the link below.

Employees coming to the UK from abroad 

Employee doesn't have a form P45

Understanding employee tax codes

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If your employee gives you a starter declaration or P45 after your first FPS for them

Late starter declaration

If your employee gives you a starter declaration after your first FPS for them

  • add any personal details
  • store the information
  • if you have not received a tax code from HMRC operate the code that relates to declaration A, B or C (refer to table above)
  • if you have received a tax code from HMRC, continue to use that code number
  • do not enter another start date on the FPS

Late P45

Sometimes a new employee may give you a P45 after you have made an FPS that includes them. For example, they may have got their P45 from a previous employer late, or they may not have given it to you in time.

What you need to do depends on whether you have received a tax code for the new employee from HMRC.

If you have received a tax code from HMRC for this employee

You should continue to use the tax code, and any previous pay and tax information, supplied by HMRC. If the student loan indicator is shown on the P45 start deducting student loan repayments, unless you've been told by HMRC to stop, from when the employee started with you.

If you have not received a tax code for this employee

You should check the details on the P45. You can find out how to do this in the section 'Using the correct tax code and starter declaration for new employees' earlier in this guide.

If the figures on the P45 (if dated after 6 April 2014) are incorrect, you should use the corrected figures.

You record the P45 information differently depending on whether you are using commercial payroll software or HMRC's Basic PAYE Tools.

If you are using commercial payroll software:

  • decide which tax code to use - see the section 'Using the correct tax code and starter declaration for new employees' earlier in this guide
  • follow your software's instructions to update your employee's details
  • adjust the employee's database entries for the week you started to show the total pay and tax and tax to date from the P45 (if dated after 6 April 2014) - or the correct ones if your software found errors
  • do not include previous pay or tax in your next FPS - only report figures from employment with your business
  • do not include another start date in your next FPS

Note: it's important that you don't put another start date on the FPS - including where there was no start date reported on their first FPS. If you do, this could cause duplicate 'employments' on HMRC's records.

How to report your payroll information

If you are using HMRC's Basic PAYE Tools:

  • decide which tax code to use - see the section 'Using the correct tax code and starter declaration for new employees' earlier in this guide and enter it into the employee database
  • in Basic PAYE Tools, select 'Manage employees', select the employee then select the 'Tax code change' link from the menu
  • click the button that relates to the statement 'HMRC has not yet issued any tax codes (P6) for this employee but I have now received a P45 part 3 from this employee' then click 'Next'
  • enter the details from the P45 then click 'Next'

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