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26th March 2024

What is a P45 and New Starter Checklist and do you need one?

When you start a new job you’ll need one of two documents, either a P45 or a New Starter Checklist. You’ve probably heard of these forms before but may not know what they are or why you need them. But don’t worry about this as we’ve put together a blog with everything you need to know about using a P45 or a New Starter Checklist.

What is a P45?

A P45 gives your employer information on your taxes, such as:

  • Your tax code

  • How much taxable income you’ve paid

  • How much money has been deducted in the current tax year

The document helps employers understand whether there have been any previous tax mistakes leading to you underpaying or overpaying on tax, meaning the form is beneficial for both you and your employer.

The P45 is typically issued in two parts: the first part is forwarded to HM Revenue and Customs (HMRC) by your previous employer, while the second part is given to you for your records. This division ensures that both HMRC and you have access to the relevant tax information, facilitating smooth transitions between employment and maintaining compliance with UK tax laws.

Why do you need a P45?

P45s are important as they help to ensure you’re not put on an emergency tax code and pay the right income tax. P45s may also be useful if you want to withdraw money from your pension and make sure you don’t pay too much tax or if you need to claim benefits when you’re out of work, as you’ll need it to complete your tax return.

It’s important to remember that your P45 is only valid for the tax year it’s provided for, however you can still keep them as HMRC has the right to carry out tax investigations 20 years after the tax year they’re inquiring about.

New starter checklist guide

What’s a New Starter Checklist?

A New Starter Checklist is used when you don’t have a P45. The document is similar to a P45 as it informs your employer on your tax and whether you’re paying the right amount. The New Starter

Checklist serves as a crucial document for individuals commencing employment without a P45. The new starter checklist functions akin to a P45, conveying essential information to the employer regarding the individual's tax status and ensuring correct taxation.

Failure to submit a New Starter Checklist or the P45 may result in the individual being placed under an emergency tax code, potentially leading to overpayment of taxes.

However, under UK regulations, individuals have the right to reclaim any excess tax paid. Therefore, it is imperative for new starters to promptly provide the necessary documentation to facilitate accurate taxation and prevent any financial burden.

When do you need a New Starter Checklist?

A New Starter Checklist as previously mentioned is required when you don’t have a P45. This may be due to your previous employer not providing one, you starting your first job or you’ve taken on a second job.

You may also have one if you’ve been unemployed for a while and therefore don’t have a P45 from the current tax year. If you require a New Starter Checklist you'll need to fill this out yourself and it’ll be your responsibility to give it to your employer.

How do I get a P45 or New Starter Checklist?

Your P45 should automatically be provided when you leave a job, but there’s no legal timescale on when an employer needs to issue one.

When it comes to getting a New Starter Checklist, your new employer should give you one if you haven’t been able to provide them a P45. Once you fill out the form, it will be passed on to the tax office for HMRC to calculate your income.

What other documents will you need?

When starting a new job you won’t just need your P45 or New Starter Checklist. You’ll also need:

  • A form of ID, e.g. passport or driving license

  • Your National Insurance number

  • Proof of address through recent bill or bank statement

  • Your bank details - sort code and account number so that you can be paid

Bringing all of these documents with you to your first day will help everything run smoothly and calm your nerves on the day. Get in touch with Payescape today to see how we can help you make your payroll processes simpler for both onboarding and existing staff.

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