A P45 is a form used in the UK when an employee leaves a job. It is a record of the employee's earnings and tax paid during their period of employment with that employer. The form is issued by the employer to the employee at the end of their employment, and a copy is also sent to HM Revenue and Customs (HMRC).
The P45 form contains four parts:
Part 1: This is kept by the employer and contains information about the employee's earnings and tax paid during their period of employment.
Part 1A: This is sent by the employer to HMRC and contains the same information as Part 1.
Part 2: This is given to the employee and contains information about their earnings and tax paid during the tax year up to the date they left their job.
Part 3: This is sent by the employee to their new employer when they start a new job, and provides information about their tax code and earnings to date for the current tax year.
The P45 form is important for both the employee and their new employer, as it provides information about the employee's previous earnings and tax paid that may affect their tax liability in their new job.
Employers are required by law to issue a P45 form to employees who leave their employment, and failure to do so can result in penalties from HMRC. Employees should keep their P45 form in a safe place, as they may need it for future reference or to provide to a new employer.
