When an employee is leaving your employment, you must provide them with a P45, if you are employing a new employee you also should obtain their P45 given by their ex-employer.
A P45 confirms the employee’s personal tax code, Pay As you Earn reference number, National Insurance Number, leaving date, earnings from your employment in the current tax year and how much income tax has been deducted from those earnings.
If the employee is leaving, whilst it may not always be possible to provide the P45 on their last working day, a P45 can be forwarded. You are obligated to do so “on the day on which the employment ceases or, if that is not practicable, without unreasonable delay”.
HMRC states it would consider unreasonable if the P45 was not provided to the employee immediately after tax and any other deductions are calculated for their final pay period.
If you have a new employee starting and they have lost their P45, you will need to use a P46 instead. The employee will need to claim a tax refund.
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