What Is a P45? The UK Employer and Employee Guide

A P45 is the form an employer must give every employee when they stop working for them, and it must be issued at the point of departure ^[1]. The document contains total pay and tax deducted from 6 April to the leaving date, the final tax code in force, and the employee's National Insurance number. Those figures then travel with the employee to their next employer, preventing the emergency tax codes that arise when a new employer has no prior-employment context.

Under Real Time Information, the leaving date is reported to HMRC via the Full Payment Submission on or before the final payday ^[2]. The P45 is therefore both a document for the employee and the visible output of an RTI event that HMRC uses to close the employment on its own records. Understanding what goes on the P45, and when, is a core payroll obligation for every UK employer.

This guide explains what a P45 contains, when the employer must issue it, how the new employer uses it, and what happens when one is missing or arrives late.

Key takeaways

• Employers must issue a P45 to every employee who leaves, including those on fixed-term contracts and zero-hours arrangements ^[1].
• The P45 has three parts for the employee and new employer. Under RTI, the Part 1 information goes to HMRC via the Full Payment Submission ^[15].
• No replacement P45 is available from HMRC if the document is lost. The employee uses the starter checklist instead ^[4].
• A P45 from a previous tax year cannot be used by the new employer for year-to-date pay and tax purposes ^[4].
• The standard tax code for most English and Northern Irish employees is 1257L, reflecting the Personal Allowance of £12,570 ^[12].

What the P45 Is

The P45 has been a feature of UK payroll since 1944 and has evolved alongside PAYE. In the Real Time Information era, the employer no longer sends Part 1 to HMRC as a postal form. Instead, the leaving date and year-to-date pay and tax figures are transmitted through the Full Payment Submission that the payroll software sends to HMRC on or before the final payday ^[2].

The physical or digital P45 produced by the payroll software is the employee's copy of information that HMRC has already received via RTI ^[14]. HMRC-recognised payroll software handles the FPS submission and the P45 generation as a single integrated process at the point of recording the leaving date.

The three parts of a P45

Payroll software generates three parts for distribution ^[3]:

A Part 1 existed in older paper forms and went directly to HMRC by post. Under RTI that step is replaced by the FPS, so Part 1 no longer exists as a separate document. Payroll software for the 2026-27 tax year generates only Parts 1A, 2 and 3 ^[3].

What information the P45 contains

The P45 carries a defined set of fields drawn from the payroll record at the date of leaving ^[1]:

The year-to-date figures cover only the current employment with this employer ^[8]. Previous employment income from the same tax year, which will have been brought in via a P45 at the time of joining, is not re-stated. HMRC's RTI records hold the full cumulative picture across all employers in the year.

When an Employer Must Issue a P45

Issuing the P45 via RTI

The employer includes the leaving date in the Full Payment Submission that covers the employee's final payday ^[2]. The payroll software generates the P45 from the same FPS data. Both actions, the submission to HMRC and the issuance of the P45 to the employee, happen together at the point of the last payrun.

If the employee's final payment was made in the current tax year but the leaving date falls in the new tax year, the employer includes the leaving date in the first FPS of the new tax year with zero pay and zero tax for that period ^[2]. This approach keeps HMRC's records accurate without creating a spurious pay run.

Under Real Time Information, the payroll submission is the legal record. A P45 that contradicts the FPS submitted to HMRC creates a reconciliation problem for the employee and should be corrected promptly ^[16].

Timing rules

The employer must issue the P45 as close to the final payday as possible ^[9]. Delays cause the new employer to apply an emergency or basic rate tax code, which typically results in the employee overpaying tax for several pay periods before HMRC corrects the position ^[10].

Where a P45 carries an incorrect leaving date, the employer corrects it by updating the leaving date in the payroll software and including the correction in the next FPS ^[2]. Sending a stand-alone corrective FPS specifically to amend a leaving date risks creating a duplicate employment entry at HMRC and should be avoided unless the payroll software explicitly supports that workflow.

How the P45 Works for a New Employer

Using a P45 vs the Starter Checklist

When an employee joins, the new employer needs either a current-year P45 or a completed starter checklist to determine the correct starting tax code ^[4]. The starter checklist, which replaced the P46 form, asks the employee to make one of three declarations about their circumstances since 6 April:

A current-year P45 supersedes the starter checklist, because the tax code and year-to-date figures are already set out in the document ^[4]. The new employer enters those figures into their payroll software and the employee's PAYE position continues from where it left off, without HMRC needing to issue a new code.

What happens when the P45 arrives late

If an employee starts work without providing a P45 and the document arrives after the first payday, the new employer does not retrospectively reopen the first payrun ^[7]. Instead, the payroll software is updated with the P45 tax code and year-to-date figures in the pay period in which the P45 arrives. HMRC's records are corrected through the subsequent FPS containing those updated figures ^[16].

The Moonworkers payroll platform for accountants handles the late-P45 scenario within the same employee record, applying the corrected figures from the period of receipt without requiring a separate adjustment run or a manual HMRC notification.

When a P45 Cannot Be Replaced

The P45 is not a replaceable document. HMRC cannot issue a copy, and the former employer cannot reissue it once the original has been produced and the FPS submitted ^[6]. The designed solution is for the employee to complete the starter checklist at the new employer, selecting the declaration that best matches their situation ^[5].

The new employer applies the tax code appropriate to that declaration and reports it to HMRC through the first FPS. HMRC will then issue a correct tax code once it has matched the employee's NI number to its own records, usually within a few weeks.

This is the structural difference between the P45 and the P60. A lost P60 can be recovered from the employer or via the HMRC personal tax account. A lost P45 has no recovery route: the starter checklist is the replacement mechanism built into the PAYE system ^[6]. For a full explanation of the P60 and how it differs, see the guide to what a P60 is.

For employees new to the UK, returning after a long gap, or in their first job, the absence of a P45 is common and expected. The instant payslip service from Moonworkers also supports one-off payslip generation for employers who need to issue a single compliant pay document without running a full payroll scheme.

Conclusion

The P45 closes one PAYE employment and starts the next. For the departing employee, it is the record of their tax position at the point of leaving. For the incoming employer, it is the instruction set for starting payroll correctly. For HMRC, it is the RTI cross-reference that ties the leaving FPS to the joining employer's first submission.

The accuracy of the P45 depends on the accuracy of the payroll records at the point of departure. An employer who corrects payroll errors promptly and records leaving dates accurately produces a P45 that transfers cleanly and spares the employee an emergency tax code in their next job.

Frequently asked questions

How many parts does a P45 have?

The P45 has three parts in the current HMRC format ^[3]: Part 1A for the employee, and Parts 2 and 3 for the new employer. An older Part 1 was historically posted to HMRC, but under Real Time Information that information is transmitted via the Full Payment Submission instead. Modern payroll software generates only the three parts described above.

Can an employer refuse to give a P45?

No. Issuing a P45 is a legal requirement under PAYE regulations ^[1]. Withholding a P45 leaves the employee without the year-to-date figures they need to avoid emergency tax in the next job. An employee who does not receive a P45 can contact HMRC, which will follow up with the employer and advise the employee to use the starter checklist at the new employer in the meantime.

How long does a P45 remain valid?

A P45 is valid for the tax year in which it was issued. If an employee presents a P45 from a previous tax year, the new employer cannot use the year-to-date figures because those figures reset to zero on 6 April ^[4]. The employee completes the starter checklist instead, and the P45 tax code may be used as a starting reference, subject to HMRC issuing a corrected code once it has matched the employee's NI number.

What should a new employer do if they receive two P45 forms from the same employee?

This sometimes happens when an employee held two jobs simultaneously and receives a P45 from each on leaving both. The new employer uses the P45 with the most recent leaving date ^[9]. Where the leaving dates are the same, the employer uses the P45 with the higher tax code allowance or the lower K-value. The unused P45 is returned to the employee.