What is a P45?
A P45 is the form an employer gives you when you leave, recording your tax code and the pay and tax deducted so far in the tax year.
What a P45 means
When you stop working for an employer, they must give you a P45 on or after your last day. It shows your tax code, your pay to date in the current tax year and the tax deducted. It exists so your next employer can carry on taxing you correctly instead of putting you on an emergency tax code.
The form has three parts. Part 1 goes to HMRC (in practice, the employer reports the leaving date through payroll). Part 1A is yours to keep. Parts 2 and 3 go to your new employer.
Example
Tom leaves a job on 31 August on a salary of £33,000 and a 1257L tax code. His P45 shows:
| Item | Amount |
|---|---|
| Tax code | 1257L |
| Pay to date (April to August) | £13,750.00 |
| Tax deducted to date | £1,702.50 |
Five months of the allowance is £5,237.50, so tax is 20% of £8,512.50. His new employer enters the P45 figures and continues on 1257L, so he neither overpays nor underpays.
Why it matters
For employees, handing over a P45 quickly avoids emergency tax. Without it, your new employer asks you to complete a starter checklist and may use a code that overtaxes you until HMRC sends the right one.
For employers, issuing a P45 is a legal requirement and your payroll software will produce it. When you take someone on, the P45 they bring tells you their starting tax code and whether they have a student loan to deduct.
A P45 is also useful evidence of employment and earnings, for example when claiming benefits or a tax refund after leaving work part-way through a year.
P45 vs P60
A P45 records pay up to a leaving date. A P60 records a full tax year in a job you were still in on 5 April. You never get both for the same employment in the same year.
If you lose your P45
Employers cannot issue a duplicate. Your new employer will use the starter checklist instead, and your personal tax account shows the pay and tax figures from the old job.
Employers sometimes forget to issue a P45 when a director stops taking a salary or a casual worker drifts away. If you keep someone on the payroll with no pay, HMRC still treats them as employed, so record a leaving date in your payroll software when they leave.
Common questions
No, but it helps. Without one, your new employer uses a starter checklist to choose a tax code, which may be an emergency code until HMRC updates it. Any overpaid tax is then refunded through later payslips.
Often, yes. If you stop work part-way through the year and do not start another job, you may have paid more tax than due. You can claim the refund from HMRC, using the figures on your P45.