What other checks MUST be made when applying a P45 for a new employee?

As well as the compulsory check of the "Total tax to date" figure at item 7 of the P45, as discussed in the newsletter of 1 October 2004, there are a number of accuracy and consistency checks that should always be performed.

1. The new employee should provide only parts 2 and 3 of the form. If part 1A, the employee's personal copy, is still attached, it should be removed and given back to the employee.
   
   
2. If no National Insurance Number appears at item 2, or if it is in the wrong format, form CA6855 must be completed and sent immediately to the National Insurance Contributions Office in order to start the tracing process.
   
   
3. From the date at item 4, the tax year in which the P45 was issued should be checked and the instructions given on page 2 of the Revenue's E12 Help Book followed carefully. For example, the tax code shown at item 6 would be used if the leaving date were in the current tax year. But, the emergency tax code would be applied, on a week1/month 1 basis, if the leaving date were in 2003/04 and the employee started after 24 May 2004.
   
   
4. If there is a "Y" entered at item 5, a Student Loan deduction must be made from the employee's first wages or salary payment. Deductions must be made, even if there has been a gap since the last employment. The employer is liable to pay the correct amount to the Accounts Office whether or not the deduction is actually made from the employee's earnings.
   
   
5. If the tax code entered at item 6 is incomplete, e.g. it shows "474" instead of "474L", it should not be assumed that the suffix is "L". The entry at item 6 should not be amended. Instead, suffix "T" should be added to the code and "474T" used when setting up the employee on the payroll. When completing part 3 of the P45, "474T" is entered at item 12
   
   
6. If there is an "X" in the second part of item 6, i.e. the employee is to be taxed on a Week1/Month1 basis, there should not be any amounts entered in the three boxes of item 7. If there are amounts entered, they must not be used when setting up the employee on the payroll and nothing should be written on the P45.
   
   
7. Where there are amounts correctly shown at item 7, a check should be made that the same figures appear on part 3 and on part 4 of the P45. If the figures do not match, the tax office must be contacted immediately. It might suggest that there is an attempt at fraud.

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