The instructions on this page are only for you if HMRC have agreed you qualify to file on paper.
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 leaves. Ideally it should be given to them on their last working day, or with their final payslip.
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 (if you use one).
- 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 (W1/M1), 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 45 of the RT7 – Guidance for employers exempt from filing Real Time Information online.
- Use tax code 0T on a ‘W1/M1’ 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 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 the Employer Further Guide to PAYE and NICs (para 1.14) or phone the dedicated paper filing Employer Helpline (0300 200 3205).
You may find that after a certain number of rings, you are transferred to the normal Employer Helpline (if there is no one available to take your call for example). If this happens you should ask that the Employer Helpline adviser tries putting you through to the specific paper filing Employer Helpline again.