AMR logo

01892 559480

Our guide to everything you need to know about P45s

Taxes can often be confusing with lots of complicated jargon to understand and mountains of paperwork to wade through. A P45 might sound familiar, but you may be uncertain about what it is, how to use it and if you really need it. Here, we discuss everything you need to know about P45s, from how to get one and what to do if you lose it.

What is a P45?

A P45 is a form which shows how much you have earned and how much tax you have paid on a salary to date in a tax year (which runs from the 6 April to 5 April).

When do I need a P45?

Our guide to everything you need to know about P45s

If you are leaving employment, whether due to resignation or termination, you will need a P45 form.  This is something you will be expected to present to your next employer or to Job Centre Plus if you are unemployed.

You will also need a P45 form when you retire to prevent you from being overtaxed when withdrawing money from your pension.

What does a P45 form look like?

The form is made up of four parts: part 1, part 1A, part 2 and part 3. However, your new employer will not need all sections. You should:

  • Send part one to HMRC
  • Keep part 1A in a safe place
  • Send parts 2 and 3 to your new employer, or to Job Centre Plus if you are unemployed

How do I get a P45?

Your employer should provide you with a P45 form when you leave their employment. It is a legal requirement for them to do so. If you have not received this form, then ask your employer for one.  

As an employer, you should use your payroll software to produce a P45 for your employees. If you are uncertain whether your payroll software can produce this form, you can contact the company who provide your software or check their website. Alternatively, speak to your bookkeeper or payroll provider for advice. Our highly qualified and certified team are Silver Xero Champions and can assist you with in-depth training for a wide range of bookkeeping software.

If your software is unable to produce a P45, then you can use HMRC’s Basic PAYE Tools.

Do I really need a P45?

Yes. A P45 is an important document for making sure you are taxed correctly. Without it you could be taxed too much or be put on an emergency tax code meaning you will have to contact HMRC to correct this.  To understand more about tax codes, take a look at our previous blog Our guide to tax codes.

What happens if I have lost my P45?

You cannot replace a P45 form. Instead, your employer will need to work out how much tax you should be paying, before your first pay day, and may require you to complete a ‘Starter Checklist’. Your employer might also obtain important information for calculating taxes, such as if you have another job or have an outstanding student loan.

How long do I need to keep my P45?

A P45 form is valid for the tax year it has been provided for but should be kept for 22 months after the relevant tax year has passed. This is the same for all documents relating to income tax. However, it is advisable to keep your P45 form indefinitely as HMRC can conduct retrospective tax investigations up to 20 years later.

What else do I need to show a new employer?

You might also be expected to show a new employer a valid form of ID, such as a passport or driving licence, proof of address, such as a bank statement or utility bill, and your National Insurance number.

Need more information? Get in touch!

If you want to find out more about P45 forms or other important tax documents, don’t hesitate to get in touch with our expert bookkeepers or payroll team. Please give us a call on 01892 559480 or contact our friendly team via our online enquiry form.

More articles you might like

March Newsletter

Afternoon Although the clocks don’t change until the end of March, we are starting to see the first signs of Spring coming through and here

Learn More
A person in a pink, black and white checked shirt is shown from the shoulders down sitting at a black table and holding a calculator in their left hand and a pen in their right. On the table are some files, a laptop, a rental agreement on a clipboard and four small wooden houses.

Better bookkeeping for landlords

It’s becoming increasingly complicated to be a landlord. Legislation covering every aspect of the business is continually streaming from Westminster and equally rapidly being updated;

Learn More

Why choose AMR Bookkeeping Solutions?

Professionalism

We combine the highest level of professionalism with a friendly, clear approach for all of our clients.

Trust

Our approach is tailored to the needs of each individual client, and we build personal relationships to make sure that our clients can have complete trust in what we do.

AAT Qualified

All of our services are provided by our team of Association of Accounting Technicians (AAT) qualified bookkeepers, highly experienced bookkeeping experts and certified accountants.

CPD Trained

Each member of the team undergoes Continuing Professional Development (CPD) which keeps them right up to date with changing tax legislation.

Accredited Experts

All our bookkeepers are accredited in leading accountancy software Sage, Xero and QuickBooks.

AAT logo
Xero Gold Partner
Sage logo
Intuit Quickbooks ProAdvisor Gold
Freeagent logo

Get in touch for a free, no obligation consultation

Find out how AMR Bookkeeping Solutions can provide the right support for your business, send us your details and one of our experts will get in touch with you without delay.

Alternatively, you are welcome to contact us by phone on 01892 559480

You can also pop into our offices in Tonbridge.