What is a P45 and Why is it Important?

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When changing jobs, it can be super exciting starting a new chapter. But in reality, there’s a lot of paperwork and things you need to provide your new employer with, such as a P45. I think we’ve all heard of a P45, but do we all understand what it actually is and why it is so important?

What is a P45?

A P45 certificate is an official document provided by your employer when your employment is terminated with them. You should then provide this document to your new employer. A P45 will include some vital information that your new employer needs including:

  • Tax code
  • Gross pay
  • The amount of tax you have paid for the year to date
  • Previous employer details

How do you request a P45?

A P45 isn’t something that you should need to request, it should be automatically provided to you upon leaving your employer (no matter the circumstances for leaving). If you haven’t received it before you leave the job or with your final payslip then it’s important to reach out to the HR team to request it.

How long is a P45 valid for?

A P45 is valid for the tax year in which it was provided. So, for example if you receive a P45 in January 2024 then this is only valid until the end of March 2024 before the new tax year starts in April. In some cases, a P45 can still be used before 24th May, if the employee left in the previous tax year. The year to date figures must however be ignored.

Why is a P45 so important?

The reason why a P45 is so important to your new employer is because without it they won’t know how much tax you’ve paid to date, and what your tax code is. This means that you could end up on an incorrect tax code and paying too much or too little tax. Whilst this can be rectified through HMRC, it is still an inconvenience to you when starting your new job.

The P45 also has several functions that aren’t directly related to starting a new job. You’ll need it to fill in a tax return, if required, and claim benefits and tax refunds if you are out of work. Further down the line, you may need to refer to your P45 to ensure you are not overcharged on tax when withdrawing money from a pension.

Starting a new job without a P45

Not having a P45 when starting a new job is not the end of the world, whilst it is important it will not prevent you from beginning your new role. As mentioned above it can influence your tax rates , but these can be rectified.

If you’re entering your first ever role or haven’t worked during the tax year, then you will instead use a new starter checklist. This is something that you’ll need to fill in with your details and a tax code will be determined before your first pay date.

Everything you need to know about employment and HR law!

If you’d like to know more about what other legal requirements employers have then check out our employment and HR law guide! A great resource for employees and employers alike to get a better understanding of the laws surrounding employment.

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HR & Employment Law Guide

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Lucy Pietrafesa
Lucy Pietrafesa
Lucy is our Digital Marketing Executive. Outside of her passion for all things digital and social at Cintra, Lucy has a love for fashion and bringing plenty of colour into life through her bright style!