The P45 is an essential document in UK employment. When someone leaves a job, their employer must provide a P45 detailing how much they have earned and how much tax has been deducted during their time with that employer.
What the P45 Contains
A P45 has four parts and includes the employee's name and address, National Insurance number, leaving date, tax code at leaving, total pay in the tax year up to leaving, and total tax deducted. Part 1 goes to HMRC, parts 2 and 3 go to the new employer, and the employee keeps part 1A.
Why It Matters
Giving your P45 to a new employer helps them apply the correct tax code from day one. Without it, the new employer may use an emergency tax code, potentially leading to over-deduction of tax that you would need to reclaim later.
When You Do Not Have a P45
If you cannot provide a P45 to a new employer, you will need to complete a Starter Checklist (previously P46). This helps determine your tax code. Common situations include first job, returning from abroad, or self-employment.