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The P45 is yet another one of the forms that HMRC issues, amongst many, to those paying tax and national insurance through the PAYE system.  Here we explain more about the P45 form –

What is a P45?

A P45 is a form an employee should expect to receive when they leave their job.  It is issued if you pay tax and national insurance through the PAYE or payroll system.  The P45 details who your employer was and the income tax and national insurance you paid while you worked for them.  Your employer would have paid over any tax and national insurance they collected from your gross pay to HMRC.

Your P45 only details the amount of tax paid during the tax year which you left your employer.  A tax year runs from 6 April to 5 April.  A P45 shouldn’t be confused with a P60 which shows the tax and national insurance you paid for the whole tax year.

What does a P45 Look Like?

A P45 can look different across different employers but this is one possible version.

P45 form

Although the layout and look of the form can vary, you should always be able to see the same details such as

  • Your personal details;
  • Your national insurance number;
  • Your employers reference;
  • The amount of tax and national insurance you paid during the tax year that you worked for them and left their employment.
Why Do You Need Your P45?

If you begin a new job you will probably have been asked for your P45.  Your new employer needs this so that they can see how much tax and national insurance you have paid, what your previous tax code was and whether there is any other information they need to be aware of when working out your net pay, such as student loans.  This information ensures you pay the right amount of tax.  If there is any information missing your new employer may put you on a tax code which means you pay too much tax.

The Different Parts of a P45

It is worth noting that the P45 form is actually made up of different parts, although you may only be issued with one or two of them.  These parts are:

  • Part 1 – this is sent electronically to HMRC to let them know you have left your current employer
  • Part 1A – this page should be kept for your own records
  • Part 2 – this should be passed to your new employer for their records
  • P3 – this should also be given to your new employer, they may need this to let HMRC know you now have a new job or they may notify electronically.  Either way, let your new employer have part 3 of your P45.

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