What is it?
A P45 is a UK tax form issued by an employer when an employee leaves a job. It summarises an individual’s pay and Income Tax deducted so far in the current tax year and provides essential information for HM Revenue and Customs (HMRC) and any new employer. The form is divided into several parts: employees keep Part 1A for their records, while Parts 2 and 3 are given to a new employer to ensure the correct tax code is applied. Supplying a P45 helps prevent the use of an emergency tax code, which can result in overpaying tax temporarily. If a P45 is unavailable, a Starter Checklist is used instead. It should be kept safely for future tax reference purposes only.
P45: A Practical Guide
Think of the P45 UK tax form as a ‘financial passport’ between jobs. Its main purpose is to tell your new employer how much tax you’ve already paid in the current tax year (which runs from April to April). This allows them to use the correct tax code—a special instruction from HMRC—so your pay is accurate from day one.
Without this form, your new company doesn’t have your tax history, which often means you’ll be put on a temporary ’emergency’ tax code and pay more than you need to. This guide explains exactly what a P45 is, how to use it, and what to do if you don’t have one.
You’ve Got Your P45: What to Do Next
Your P45 is split into different sections: Part 1A, Part 2, and Part 3. Your main job is to pass the correct parts to your new employer while keeping a copy for your own records. Here’s what to do:
- Give Parts 2 and 3 to your new employer. This is the most important step. Hand these over as soon as you start your new job, as they contain the details your new payroll department needs to set you up correctly.
- Keep Part 1A for your personal files. This part is your final receipt from your old job, showing your total pay and the tax you paid. It’s wise to keep it somewhere safe for at least 22 months for your records.
Following these two steps helps you avoid the common headache of being put on an emergency tax code.
What to Do If You’ve Lost Your P45 (Don’t Panic!)
Misplacing a P45 is a common situation with a straightforward solution. Crucially, you cannot get a replacement. Your old employer is only allowed to issue your P45 once, and HM Revenue and Customs (HMRC) won’t send you a copy either.
Instead, the solution lies with your new employer. As soon as you realise you don’t have your P45, inform your new manager or HR department. They will ask you to fill out a different form called an “HMRC Starter Checklist.” This is the standard procedure for anyone starting a new job without a P45, including those in their very first job.
This checklist helps your new employer work out which tax code to use. It asks basic questions about your employment situation, such as whether this is your first job since the start of the tax year (6th April). Your answers give them the essential information to get your tax payments started correctly.
Since the Starter Checklist lacks the detailed history of a P45, your employer may have to place you on a temporary tax code until HMRC sends them the correct one. This often results in you paying more tax than you should for a short period—a situation known as being on “emergency tax.”
The Hidden Cost of No P45: Understanding Emergency Tax
The phrase “emergency tax” can sound alarming, but it’s just the name for a temporary situation. Without a P45, your new employer doesn’t know your correct tax code or how much tax you’ve already paid in the tax year. To avoid mistakes, the PAYE system puts you on a default setting.
This temporary approach uses a different tax code. Instead of your normal code (often 1257L), which gives you a tax-free allowance, an emergency code like 0T or BR might be used. These codes often result in all your pay being taxed, which is why your first payslip can show a surprisingly low take-home pay.
Crucially, this is almost always a short-term issue. Once you’ve submitted your Starter
Checklist, HMRC will process your details and send the correct code to your employer. Any tax you’ve overpaid is then automatically refunded through your salary in a future payslip, so you won’t lose out.
Starting Your First Job? Here’s Why You Don’t Have a P45
If your new boss asks for a P45 during your first job, don’t worry—this is completely normal. A P45 is a form you get when you leave a job, so if you’ve never been employed before, you simply won’t have one.
Instead of a P45, your employer will ask you to fill out a “Starter Checklist”. This short questionnaire from HMRC gathers the details needed to set you up correctly. By completing it accurately, you tell your employer to put you on a standard tax code from day one, ensuring you pay the right amount of tax from your very first payslip.
What if a Previous Employer Refuses to Give You a P45?
Legally, your old employer must provide you with a P45 without unreasonable delay. If it doesn’t arrive, it can cause tax problems in your next job, so it’s important to chase it up.
- Follow up with your ex-employer. Your first move should be to contact their payroll or HR department. An email is ideal so you have a record of your request. This often solves the problem, as it may be a simple administrative error.
- Contact HMRC if there is no response. If you’ve chased your old employer and they still fail to send your P45, you can contact HM Revenue and Customs (HMRC) directly. They can compel your former employer to issue it and use their existing records to send the correct tax code to your new employer.
P45 vs. P60: What’s the Difference?
It’s easy to get tax forms mixed up, but the P45 and P60 serve completely different purposes.
Think of it this way: your P45 is a ‘leaving document’. You only get it when you stop working for an employer, summarising what you’ve earned and paid in tax up to that point. In contrast, a P60 is an ‘annual summary’.
If you are still employed on April 5th (the end of the tax year), your employer gives you a P60 showing your total earnings and tax for the full year with them.
The practical difference is just as important. Your P45 is the handover note for a new employer to set your tax code. Your P60 is your proof of annual income, used for things like applying for a mortgage or filling out a Self-Assessment tax return. You never give it to a new employer.
Your P45 Action Plan: Key Takeaways
You now have the knowledge to handle your P45 confidently and ensure your pay is managed correctly from day one. Instead of a source of stress, you can see it as a simple tool.
To keep your job transitions smooth, just follow this checklist:
- Always give Parts 2 and 3 of your P45 to your new employer.
- If you don’t have one, fill out the Starter Checklist immediately.
- Check your first payslip to confirm your tax code is correct.
Finally, remember that if you do overpay tax, it’s a common and temporary issue that is usually refunded automatically. The best habit you can start today is to create a “Tax” folder—digital or physical—and file away Part 1A of every P45 and all your annual P60s. You’ll thank yourself later.
IRIS Software Group
Award winning software and solutions for the businesses of the future
Discover why more than 100,000 customers across 135 countries trust IRIS Software Group to manage core business operations