The short answer is that yes, you can take on an employee who doesn’t have a P45. In this blog post we shed some light on P45 forms, and what to do if your new recruit doesn’t seem to have one.
As a start-up or micro-business, the world of employment and recruiting staff might have been a million miles from your mind for quite some time. However, there will hopefully come a point – perhaps it has already arrived – when your venture is flourishing so nicely that you now need to take on an extra pair of hands or two.
What is a P45 form?
Put simply, a P45 form is a document which demonstrates how much tax you have paid on your salary during the financial year. Each employee is provided with this code of reference when employment is terminated.
The next employer uses the information on the employee’s P45 form to get everything lined up with HMRC, and move the employee over on to their payroll system.
Why doesn’t my new employee have a P45?
There are an entire plethora of circumstances, so we can’t speak on behalf of every P45-less employee you might stumble across. That said, there are two main factors which answer for the majority of these cases and they are that:
This is the first job the person has had, and therefore they won’t have any tax or PAYE documentation from previous employers.
The person is taking on a secondary job, so isn’t leaving one company for another.
What should I do if a new member of staff doesn’t have a P45?
If you do find yourself recruiting a new member of the team who doesn’t come with a P45 then you’ll need to complete HMRC’s New Starter Checklist. This simple checklist was put in place to replace the old P46 forms, which are no longer in use.
In the absence of a P45, the checklist enables you to gather all of the information you’ll need to set an employee up on your PAYE system, including things like:
Loan commitments (including student loans)
National Insurance number
This checklist is available to fill in digitally or as a printable document – either of which should be completed and returned to your payroll department (not HMRC). For employees filling any information in, this will just need to be returned to the employer.
If you’d like to speak to one of our friendly experts about how we can help with your business accounting and bookkeeping, simply call 020 3355 4047 or send a message to email@example.com
About The Author
AAT Level 3 qualified, I specialise in providing payroll functions and services for a wide variety of clients and businesses.