P45 - What is it?

If you leave your job - either voluntarily, through dismissal, redundancy or because you retire - your employer should give you a Form P45.

It is a record of your pay and the tax that has been deducted from your pay so far in the current tax year. It shows:

• Your tax code and PAYE (Pay As You Earn) reference number
• Your National Insurance Number
• Your Leaving Date
• Your earnings in the current tax year
• How much tax was deducted from your earnings in the current tax year

The P45 also gives details of your employers tax office and your employers tax reference number.

Emergency Tax
Please note: If tax has been deducted on the emergency code, the P45 will have an X in the box marked week 1 or month 1 and there will not be any details of your total pay or tax in that tax year.

What do I do with it?
A P45 has four parts:

Part 1 - your employer sends this to HMRC and gives you the other three
Part 1A you should retain this for your own records
Parts 2 & 3 when you start a new job or claim Jobseekers Allowance you give Part 2 & Part 3 to your new employer or to the Jobcentre
Your employer should automatically give you a P45 when you leave, although you may have to wait until your final wages are paid.

Why do I need it?
Your P45 provides a link between your jobs for the Pay As You Earn (PAYE) system. It doesn't contain any personal information but tells your employer enough tax information so you can be taxed at the same rate as in your previous job. For example, your P45 shows your code number, which is needed to work out the tax due.

Your P45 also tells your new employer whether or not you are making student loan repayments. Without the P45 your new employer will be unable to carry on taking student loan repayments until the Student Loans Company (SLC) issue a new start notice.

What if I dont get one?
Your employer should automatically give you a P45 once they have paid your final salary. If not, ask them for it youre entitled to it by law.

If your employer fails to give you a P45 after being asked to do so, you should contact your tax office as they may encourage your employer to issue a P45. If your employer cannot be persuaded , a new employer will ask you to complete a P46 form, which allows your new employer to deduct tax on an emergency code until the right amount of tax to be deducted is worked out.

What if I am starting work after claiming Jobseekers Allowance?
If you are starting work again after claiming Jobseekers Allowance or contributory Employment and Support Allowance, Jobcentre Plus will give you P45U (if you were claiming Jobseekers Allowance)or P45ESA (if you were claiming Employment and Support Allowance) which will include details of the taxable benefit you have received as well as the normal P45 details.

I have lost my P45 what can I do?
If you have lost your P45, P45U or P45ESA, you will not be able to get a duplicate as these are never issued.

It may also mean that you will not pay the right amount of tax and student loan repayments.

Because your new employer will not have your tax code, he will give you form P46 to fill in, which will then be sent to HMRC. You may find that you pay too much tax while HMRC deal with the P46 and let your new employer know your tax code.

There might also be a gap in your student loan repayments. At the end of the year you could find that you have not made sufficient repayments and you could be charged interest by the Student Loan Council. To avoid this you should phone the SLC Helpline. You will need your student support or student loan account number.

A P45 is issued by the employer when an employee leaves. It is a multipart form. In the UK, the front section, Part 1, is given by the employer to Her Majesty's Revenue and Customs, who then record the pay and tax details on to the individual's taxpayer record. Part 1A is to be retained by the employee, Part 2 retained by the new employer, and Part 3 taken by the new employer and sent to their tax office. The P45 contains details of earnings and tax paid during the tax year.