How is form P45 completed for a leaver?
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All employees who leave, including those who say they are not going to work again, must be issued with a P45 if they have been issued with a tax code, whether that derives from a P45, or from following P46 procedures, or from a coding notice issued by HMRC. Exceptionally, in the case of employees who are retiring from their employment and will be receiving a pension from the same employer, form P160 (form P46(Pen) from April 2009) is completed instead.
The following employees are not treated as having been issued with a tax code, so no P45 is issued when they leave:
- students for whom a valid P38(S) is in force
- casual workers engaged for not more than one week in the tax year (or two weeks in the case of harvest workers), who do not produce a P45 and whose earnings are
- between the NICs lower earnings limit and the PAYE threshold, or
- below the NICs lower earnings limit.
When an employee leaves, employers have the choice of
- completing a four-part paper P45 (by hand or printer), and sending Part 1 to the tax office and giving Parts 1A, 2 and 3 to the employee, or
- filing Part 1 of the P45 online and completing Parts 1A, 2 and 3 by hand or printer to give to the employee.
The second of these options will be mandatory for PAYE schemes with 50 or more employees from April 2009, and for all other PAYE schemes from April 2011.
The following Table shows the items of information that, by law, must be provided on the paper 45 or the online equivalent when an employee leaves. A new version of form P45 is to be introduced from October 2008 to allow additional information to be recorded that will be mandatory from April 2009. The number shown below against the paper P45 entries is the item number on the form.
| Information
| Online P45
| Paper P45
(to 9/08)
| Paper P45
(from 10/08)
|
Employer PAYE reference
Office number
Reference number
*
*
1
✓
✓
1
✓
✓
| Employee's NI number
| *
| 2 ✓
| 2 ✓
|
Employee
Title (Mr, Mrs etc)
Surname or family name
First or given name(s)
*
*
*
3
✓
✓
✓
3
✓
✓
✓
| Leaving date (date employment ended, not necessarily the last working day)
| ✓
| 4 ✓
| 4 ✓
|
| Student Loan deductions to continue (even if none were actually made due to the employee's earnings levels)
| *
| 5 ✓
| 5 ✓
|
Tax Code
Tax code used for the final payment
Week 1 or Month 1
✓
✓
6
✓
✓
6
✓
✓
Final pay and tax (only if cumulative)
Week number or month number
Total pay to date, including earnings in prev employment
Total tax to date, including tax deducted in prev employment
✓
✓
✓
7
✓
✓
✓
7
✓
✓
✓
Pay and tax in this employment (if W1 or M1)
Total pay in this employment only
Total tax in this employment only
✓
✓
8
✓
✓
8
✓
✓
Employer reference information
Works or payroll number
Department or branch, if any
*
*
9 ✓
10 ✓
| 9
✓
✓
| Gender - Male or Female
| *
-
| 10 ✓
|
| Date of birth
| *
-
| 11 ✓
|
Employee's private address
Address
Postcode
*
*
11
✓
✓
12
✓
✓
Employer certification
Name and address
Postcode
Date form completed
*
*
*
12
✓
✓
✓
13
✓
✓
✓
| Employee has died
| ✓
| ✓
| ✓
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
* items that are already held in the payroll system or online database and that do not have to be input again when filing online
The paper forms must be completed in capital letters and without errors. When the paper forms are completed, the details at items 1 to 7 should appear on all parts of the P45. Items 8 to 13 appear only on Parts 1 and 1A.
Part 1 is sent immediately to the tax office or filed online. The remaining three parts are given to the employee, with instructions to retain Part 1A before handing Parts 2 and 3 to the next employer.
Once issued, a P45 may not be amended. All four parts of the P45 must have identical entries. If an employee asks for a copy, a duplicate must never be issued but the same information can be provided in a letter.
If an error is made when completing the form and it has not yet been issued to the employee or sent to the tax office or filed online, it may be destroyed and a new form completed. Changes should never be made by crossing out figures or using correction fluid.
If Part 1 has already been sent to the tax office or filed online when an error is discovered, the employer should write a letter to HMRC, giving details of the error. The corrected information can also be given to the employee in a letter, but never on a new P45.
If the employee has died, a "D" is entered in the box provided and all four parts of the P45 are sent to the tax office (or the other three parts if Part 1 is filed online). If any earnings are paid subsequently to the personal representative of the deceased, tax code BR must be used. No NICs are deducted from any payments made after the employee's death.
If an employee is leaving but will continue to be paid by the employer as a pensioner, form P160 is completed instead of form P45. From 6 April 2009, form P46(Pen) will be used instead. The form must be sent to the tax office within 14 days of retirement, and a copy given to the employee. The employee's tax code, on a W1/M1 basis, is used until otherwise notified by the tax office. If a new tax year starts before a new code is notified, the same tax code is used on a cumulative basis.
Certificates of election for married women (CA4139/CF383 or CF380A) and certificates of age exception (CA4140/CF384) are returned to the individuals concerned when they leave. However, certificates of deferment (CA2700) must be retained by the employer.
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