| 1. A new employer should ask a new employee | | | | The employer should enquire if the employee had |
| to copmplete a P46 form if that employee does | | | | any earnings since the P45 leaving date in case |
| not have a P45. The P46 form is used to obtain | | | | there has been other earnings, for example, the |
| the employee details and should be sent to the | | | | employee may have been registered unemployed |
| local PAYE tax office on the date employment | | | | and received social security payments which |
| starts. If the employee has ticked box A or B the | | | | would reduce the tax refund required and the |
| employer can retain the P46 until the new | | | | social services would be issuing an updated P45 |
| employee earnings reach the lower earnings limit. | | | | showing the cumulative earnings to date. |
| 2. P45 forms are in four parts, part 1 is retained | | | | 7. If the leaving date is different to the week or |
| by the issuing employer and the employee retains | | | | month number shown on the P45 tax is calculated |
| part 1 A and should hand parts 2 and 3 to the | | | | by using that week or month number for your |
| new employer. The new employer cannot use the | | | | employer PAYE records but also check that the |
| P45 tax details unless both parts are handed over. | | | | income tax deducted is correct. |
| If either part 2 or 3 of the P45 form is missing | | | | 8. When an employee is paid by a new employer |
| then the employee must be asked to complete | | | | in the same pay period as the previous employer, |
| the Inland Revenue P46 form. | | | | which can happen for example when a previous |
| 3. The employer retains part 2 and enters details | | | | employer paid weekly and the new employer |
| of the employee and previous earnings, tax | | | | monthly, the tax deducted may well be higher |
| deducted and tax code into the PAYE records. | | | | than normal due to the previous employer already |
| Part 3 is sent to the PAYE tax office | | | | taking account of the employee personal |
| 4. A new employee may hand an employer two | | | | allowance. |
| P45 forms in which case send both part 3 to the | | | | 9. There are circumstances when a different tax |
| PAYE tax office and use the P45 tax form | | | | code to that shown on the form may be |
| showing the highest earnings for the PAYE | | | | applicable. If the P45 was dated before 7 |
| records. If the employer is uncertain contact the | | | | September 2008 and the employee joins after 7 |
| PAYE tax office for advice. | | | | September add 60 to the tax code ending with |
| 5. HMRC tax office issue a P6 form after | | | | tax code suffix L. For example 543L would be |
| receiiving the P46 form which advises the | | | | changed to 603L. No change is required if the P45 |
| employer which tax code is to be used. If the | | | | was dated after 7 September 2008. |
| employee produces a P45 late but received prior | | | | If the employees P45 is from the previous tax |
| to receiving the P6 from HMRC an employer | | | | year the in addition to using the tax code stated |
| should use the tax code, earnings and tax paid to | | | | that employee should also be put on the |
| date as shown on the P45, providing the form | | | | emergency code, week one, month one basis |
| contains a leaving date in the current financial | | | | using the tax code 543L prior to 7 September |
| year. If the P6 form has already been received | | | | and 603l after. |
| from the tax office then the P45 is irrelevant, | | | | 10. The P45 forms can be submitted to the PAYE |
| filed and ignored for tax purposes. | | | | tax office online provided the employer is |
| 6. If there is a time difference between the | | | | registered with HMRC to file PAYE forms online. |
| leaving date and new start date the first pay | | | | HMRC provide free online return services for |
| date may result in a tax refund. It is important to | | | | online submissions. |
| check previous income tax deducted was correct. | | | | |