Most people have come across the term P45… but not everyone knows what it means. You get the gist that it’s something important, but you’re not exactly sure what purpose it serves.
Fear not, today we’re telling you everything you need to know about your P45.
A P45 is a document issued to you by your employer when you leave your job, whether you were full-time or part-time. It includes information relating to your salary, and how much you’ve paid in taxes over the past financial year.
In this blog, we’ll also cover:
- When do you get a P45?
- Why is it important?
- What’s in a P45?
- How long is it valid for?
- Can you start a job without it?
- How do you get off emergency tax?
- What other paperwork will you need for a new job?
When do you get a P45?
Your P45 will be sent to you by email or by post when you leave a job. Your employer has to issue your P45 immediately once your final pay and tax deductions have been calculated. You shouldn’t need to request your P45. Instead, your employer should send it to you immediately.
Why is it important?
A P45 is important because it contains your tax code, and tells your employer how much you should be getting taxed.. Without the P45, you may end up being put on emergency tax and paying more tax than you should be.
What’s in a P45?
A P45 is made up of 4 sections: Part 1, Part 1A, Part 2 and Part 3. Your employer will send Part 1 to HMRC. You keep Part 1A for your own records. And you give Parts 2 and 3 to your new employer.
How long is it valid for?
Your P45 is only valid for the tax year it was created in. But don’t be so quick to throw it out. It’s best to keep it in your records for at least 22 months after the tax year has ended as HMRC are still able to refer back to it.
Can you start a job without it?
Yes, you can absolutely start a job without your P45. However, without a P45, your employer may ask you to fill out a ‘starter checklist’ and you could end up on an emergency tax code if your new employer doesn’t have the required information. Unfortunately, if you’ve lost your P45, you aren’t able to get a replacement.
If you’re on emergency tax, you’ll notice one of these codes on your payslip:
- 1257 W1
- 1257 M1
- 1257 X
How do you get off emergency tax?
If you’re put onto an emergency tax code, you’ll stay on it until the end of the tax year. At that point, you may be owed a tax rebate. If you think you’ve overpaid on tax, be sure to claim it back!
What other paperwork will you need for a new job?
Your P45 isn’t the only bit of paperwork you’ll need. Your employer will need to carry out identity checks and your right to work in the UK. Depending on your status, you may need to present your ID (usually either a driving license or passport), proof of address (utility bill, bank statement etc), your bank details, your national insurance number or other proof of your right to work.
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