What is P45 Form? How to Get it When Leaving a Job

In the UK, employers use several tax documents, including the P45, P60, and P11D forms, to report your income and tax information. If you are leaving a job, your employer gives you a P45, which contains all the essential details. It is a crucial document that ensures you do not get penalised with surprise taxes when starting your new job. This guide explains what a P45 is, why it matters, and how it helps you avoid emergency tax issues when starting a new job.

What is a P45 Form?

A P45 is a document that employers give you when you stop working with them. This is an official tax document issued under the UK’s Pay As You Earn (PAYE) system. While leaving the job, you must obtain this form, as it contains your leaving date, tax code, and total pay and tax from 6 April until the date you left. It also includes personal details like the National Insurance number.

What Does a P45 Form Do?

A P45 records your earnings and how much tax you have paid so far in the tax year. This information is included to ensure you don’t overpay the tax. If you are starting a new job, your new employer uses this form to apply the correct tax code.

Records Tax Data

It records the employee tax code, gross pay, and the amount of income tax deducted during the tax year up to your leaving date.

Informs New Employer

It tells your new employer about your earnings and the tax paid. When you start a new job, your employer uses the P45 form to set up your payroll correctly. This ensures that an employee does not get an emergency code.

Informs HMRC

Under HMRC PAYE regulations, employers must provide a P45 when an employee leaves their job. The P45 notifies HM Revenue and Customs (HMRC) that you have stopped working with a specific employer. This is important for accurate tax calculations.

Support While Unemployed

If you are not working and want to claim taxable benefits, you can use a P45 form. This prevents you from overpaying tax on benefits and allows for tax refunds.

Why is P45 Important?

A P45 is important because it helps ensure employees pay the correct amount of tax when changing jobs. The form provides employers with the information they need to assign the correct tax to an employee. When an employee switches jobs, the new employer does not yet have details of the employee’s earnings and tax paid during the current tax year. The P45 fills this data gap by providing the employee’s active tax code and cumulative taxable salary. If an employee fails to provide a P45 form, it typically triggers an emergency tax code. If a P45 is not provided, the new employer may apply an emergency tax code temporarily until HMRC receives the correct income information. For example, if you start a new job without a P45, your employer may temporarily place you on an emergency tax code, which could reduce your take-home pay until your records are updated. This doesn’t feel good, right? So, this makes P45 important.

Why Would You Be Sent a P45?

As mentioned above, you will be issued a P45 when you leave a job. Under UK law, an employer must provide this document when an employee stops working with them. Other common reasons you will be sent a P45 form are:

• If you are changing jobs
• If you are starting a new or additional job
• If your temporary contract is terminated

How Long is a P45 Valid For?

There is no strict expiry date for a P45, but it is considered valid for the specific tax year it was issued in. If you start a new job in the same year, your employer can use a P45 form to apply the correct tax code. However, if you stop working and do not get a new job in the same year, your new employer will ask you to complete a Starter Checklist instead.

What is the Difference Between the P45 and P60?

There is a huge difference between P45 and P60. You need a P45 form when you stop working, whereas a P60 is needed at the end of every tax year. P60 form summarises your total earnings and taxes paid over the year. You need this form to claim back overpaid tax and as proof of your income. Additionally, if you apply for a loan or a mortgage, this P60 can be helpful. Look at the table below to understand the features of both the P60 and P45 forms.

Features	P60	P45
Issued when	At the end of the tax year	When an employee leaves an employer
Who gets it	Active employees	Employees leaving a job
Purpose	Shows the total annual tax summary	Transfers tax details to a new employer
Validity	Historical early record	Used during the current tax year

How Do I Get My P45 After Leaving My Job?

You do not apply for a P45 after leaving a job. Your employer is responsible for issuing it to you when you stop working with them. You may receive it as a paper document, by email, or through your employer’s payroll or HR portal.

How an Employer Issues P45 Form?

An Employer issues a P45 to an employee after calculating the employee’s final pay. The employer generates the form through their payroll software after the employee’s final payroll has been processed.

• They process the final payment
• Update employee details in payroll software
• Send an electronic notice to HMRC
• Generate and distribute the document

Read our other blog, Best Payroll Software for Small Businesses in the UK, to learn how you can ensure tax compliance and reduce errors.

How Can I Get P45 Online?

You cannot get a P45 directly from HMRC because only employers are legally required to issue it. They issue it when you leave the job. If you have stopped working with them and they did not give you a P45 form, you must ask them for one. Furthermore, employers cannot issue an official duplicate P45, but they may provide a statement of earnings or payroll summary containing the same information. Alternatively, you can fill in the starter checklist.

What To Do If Your P45 Is Incorrect?

Your P45 may have a mistake, such as a wrong leaving date, an inaccurate tax code, or incorrect total pay. In such a case, you must take immediate action because an error in the P45 form can lead to underpayment or overpayment of the tax. If your personal details are wrong, fill out the starter checklist. Give it to your new employer to correct the details. However, if your tax amounts are wrong, ask your previous employer to fix the details. Your old employer will then send you a new one. If you do not get the correct form, you can contact HMRC using the Check Your Income Tax online service to tell them that your details are wrong. It will contact your employer for the correct details.

The Bottom Line

Getting your P45 form is crucial when you are starting a new job. It ensures your tax records are accurate and protects your take-home pay from unnecessary penalties. However, an incorrect P45 can affect your salary in your new job. It is important to check the stated figures against your final payslip and give it to your new employer as soon as possible. Moreover, if you need to amend your P45 to fix some mistakes, ask your previous employer to do it. If you do not get an amended P45 form, you can directly contact HMRC. Still overwhelmed and stuck with tax errors? You don’t have to do it alone. Our team is here to get you out of the problem. At MicroentityAccounts, we have professional accountants who help you correct your payroll data and claim back overpaid tax.  Contact us now and get your tax sorted without any hassle!