What is a P45 meaning and how do I get one?

When you leave a job or transition to a new one, you will encounter a crucial document known as the P45. However, what exactly is it, and how can you get one? Let us talk about P45 meaning into the details:

Why Do You Get a P45?

Your P45 shows how much tax you have paid on your salary during the tax year (which runs from April 6 to April 5). It is like a receipt for all those tax contributions you have dutifully made.

The Four Parts of a P45

  1. Part 1: Your employer sends the details from this section directly to HM Revenue and Customs (HMRC). It helps HMRC track your tax payments accurately.
  2.   Part 1A: Keep this part for your own records. It serves as a personal reference and contains information about your employment history.
  3.   Part 2 and Part 3: Your employer hands these parts to you. When you start a new job, you will need to provide Parts 2 and 3 to your new employer. You can submit them to Jobcentre Plus if you are not currently working.

How to Get Your P45

Here are steps of getting P45:

  1. Your employer should automatically generate your P45 through their payroll system. It is like a digital wizard conjuring up your tax paperwork.
  2. If, for some reason, your P45 does not appear, just ask your employer. They will whip it up for you.

Can I use my old P45 for a new job?

When starting a new job, you can use your old P45 from your previous employer to help with tax-related matters. Here is how it works:

Late P45: If you receive a P45 after you have already registered with HM Revenue and Customs (HMRC) for your new job, you can use it to work out your tax code and update your details in your payroll software. Make sure to update the following fields in your software:

  • Total pay to date
  • Total tax to date: If you left your last job after April 5, 2022, ensure you update these fields for the first week you include this information.

If you do not have a P45, your new employer will provide you with a starter checklist. Use this to update the starter declaration of your payroll records. Continue using the tax code in first Full Payment Submission (FPS) until HMRC sends you a new one.

What Does a P45 Look Like?

While there is not a standardized format for the P45, each one may vary a little. However, all P45 forms contain important information such as your title, full name, national insurance number, tax code, and salary details. 

The form is divided into four parts: 1, 1A, 2, and 3. Part 1 is sent to HMRC, Part 1A is kept for your records, and both Parts 2 and 3 are given to your new employer.

How Is a P45 Issued?

As an employer, it is your responsibility to issue employee P45s. Often, payroll software can handle this task for you. If you do not use payroll software, HMRC provides free PAYE tools that can help you calculate tax and National Insurance and help in issuing forms like the P45. Companies with fewer than ten employees can use HMRC’s free payroll software, which you can find here.

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