The instructions on this page are only for you if HMRC have agreed you qualify to file on paper.
Paper filing means that you send the information about your employee and the payments you make to them to HMRC on paper. The process described here, what to do when an employee leaves, applies under the RTI paper process from 6 April 2014
When an employee leaves, you must enter the leaving date on the next RT2 (full quarterly payment summary) and complete and prepare a form P45, sometimes also known as an employee’s leaving statement. This P45 is provided for the employee’s information only, so that he can have a copy of his pay and tax details for his own records and give a copy to his new employer. It does not need to be sent to HMRC.
There is no deadline as such, but the P45 must be completed as soon as possible after the employee leaving.
The basic information you need to enter includes:
- Your employer PAYE reference.
- The employee's name, address, National Insurance number, date of birth, gender and works/payroll number. Make sure that you provide the employee's full forename(s) and surname and that they are spelled correctly. Check that you provide the correct date of birth and that this has been verified from an official source such as a birth certificate or passport; always provide the correct National Insurance number.
- The employee's date of leaving and their tax code.
- An indication of whether you've been making Student Loan deductions from the employee.
You will also need to include details of the employee's earnings and tax deductions. Your pay records will give you this information.
If the employee is on a cumulative tax code, then you will need to provide:
- their overall pay and tax totals for the tax year so far, including from any previous employments during the year, and
- their pay and tax figures relating only to their work for you during the tax year, if these differ from the employee's overall totals for the year.
If the employee is on a Week 1 or Month 1 code, then provide their tax and pay figures relating only to their work with you in the current tax year.
If you need to make a payment to an employee who has left, then the HMRC guidance on what to do is on page 50 of the RT7 – Guidance for employers exempt from filing Real Time Information online.
- Use tax code 0T on a ‘Week 1’ or ‘Month 1’ basis and deduct National Insurance and any student loan repayments as normal – unless it’s an ‘irregular’ payment like accrued holiday pay in which case you treat it as a weekly payment.
- Include the payment and the PAYE tax and NICs you have deducted on the employee’s payroll record.
- Give the employee a letter showing the date of the payment, the gross amount, and the PAYE tax you have deducted and confirmation that the payment is a post-leaving payment.
- Include the details, tick the ‘payment after leaving’ box and show the original date of leaving on the RT2 Full quarterly payment summary.
You must not give the employee another form P45 or amend a P45.
For more detailed help, please see CWG2 Employer Further Guide to PAYE and NICs or phone the dedicated Employer helpline (0300 200 3205).