The P45 Form: A UK Guide for 2026/27 – What It Is & How to Use It

The P45 form is a fundamental document in the UK’s Pay As You Earn (PAYE) system. Its correct handling is essential for ensuring tax accuracy when an employee changes jobs. This guide outlines the purpose of the P45, its components, and the legal obligations for both employers and employees as of 19 June 2026.

What is a P45 Form?

A P45 is the official form an employer must issue when an employee ceases their employment. Its primary function is to provide a summary of the employee’s pay and the tax they have paid in the current tax year up to their leaving date.

Under Regulation 36 of the Income Tax (Pay As You Earn) Regulations 2003, an employer is legally required to complete and provide a P45 to a departing employee. This should happen on the day the employment ends or, if not practicable, without unreasonable delay.

The Four Parts of a P45 and Their Destination

The P45 is a multi-part form, with each section serving a distinct purpose.

Key Information Contained on a P45

The P45 contains critical data that allows a new employer to correctly process payroll and deduct the right amount of tax. The specific details are mandated by the PAYE Regulations.

Key information includes:

• The former employer’s PAYE reference.
• The employee’s name and National Insurance number.
• The employee’s tax code at the leaving date and whether it was applied on a cumulative basis.
• The date the employment ceased.
• The employee’s total pay and total tax deducted in the tax year to date.

This information is transferred to the new employer’s records, often referred to as a “deductions working sheet”, to ensure continuity in tax calculations.

What Is the Process for Employers and Employees

Former Employer’s Duties

Upon an employee leaving, the employer must:

1. Complete the P45 with all the required pay and tax details.
2. Provide Parts 1A, 2, and 3 to the employee without unreasonable delay.

Employee and New Employer’s Duties

When starting a new job, the employee should:

1. Provide Parts 2 and 3 of the P45 to their new employer.

The new employer must then:

1. Use the information on the P45 to set up the new employee on their payroll system.
2. Record the employee’s tax code and cumulative pay and tax figures.
3. Complete their details on Part 3 and send it to HMRC.

This process ensures the employee’s tax is calculated correctly from their first payday, preventing the common issue of being placed on an emergency tax code. If the P45 is provided late, the new employer must update their records with the figures from the P45 and recalculate the tax due.

The P45 Form Common Scenarios and Solutions

• Lost P45: An employer cannot issue a replacement P45. If an employee loses their form, their new employer will ask them to complete a “Starter Checklist” (what used to be known as a P46). This helps determine a tax code, but it may be a temporary emergency code until HMRC provides the correct one.
• No P45 Issued: If a previous employer fails to issue a P45, the new employer must use the Starter Checklist process.
• Leaving to Claim Benefits: When leaving work to claim Jobseeker’s Allowance or Employment and Support Allowance, the claimant must give their P45 (Parts 2 and 3) to the Department for Work and Pensions (DWP). When the claim ceases, the DWP will issue a P45U or P45ESA, which functions like a standard P45 for a new employer.

P45 vs. P60: What’s the Difference?

It is important not to confuse the P45 with a P60.

For definitive guidance, it is advisable to consult the Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682) directly, as well as the latest employer guidance published on GOV.UK.