What is a P45?

A P45 is a certificate given by an employer to an employee at the end of their employment. It details their National Insurance number, most recent tax code, gross pay and tax paid to date during that tax year.

A P45 has four parts – Part 1, Part 1A, Part 2 and Part 3. The employer sends details for Part 1 to HMRC and gives the other parts to the employee. The employee gives Part 2 and 3 to their new employer (or to Jobcentre Plus if they’re not working). The employee keeps Part 1A for their own records.

By law, your employer must give you a P45 when you leave their employment. You have the right to ask for one if they do not give you a P45. An employee must give their P45 to their new employer or benefit agency. If you were employed and also earn(ed) money from self-employment, you might need your P45 (or P60) when completing your Self Assessment tax return, because you need to include details of your income from employment.

If someone doesn’t have a P45, their new employer will have to work out how much tax they should pay on their new salary. This can happen if someone’s starting their first job, taking a second job or they can’t get a P45 from their previous employer. If so, the employee must let the new employer know about any other jobs or benefits they receive and if they have a student loan. Employers normally ask new employees to fill in a “starter checklist” or communicate the information in writing. The employer then uses the information to determine the employee’s correct tax code before their first payday.