What Is a P45 and Why Is It So Important to Give It to Your New Employer?

A complete UK guide for employees and employers: PAYE tax codes, emergency tax, changing jobs, Starter Checklists, multiple jobs, Student Loans and what to do if your P45 is missing or wrong

Changing jobs in the UK normally involves a familiar list of paperwork: your new employment contract, bank details, proof of identity, National Insurance number and, in many cases, a document called a P45.

The P45 can look like a routine payroll form, but it performs an important function.

It tells your new employer what happened in your previous employment during the current tax year, including how much taxable pay you received, how much Income Tax you have already paid and which tax code was being operated when you left.

That information helps the new employer continue PAYE correctly rather than treating your new employment as though the earlier part of the tax year did not exist. HMRC specifically advises employees changing jobs to give their P45 to the new employer so the employer can work out how much tax to deduct. (GOV.UK)

However, one important misconception should be corrected immediately:

You can start a new job without a P45. The P45 is extremely useful, but it is not a document without which you are legally unable to work or be paid. If you do not have one, your employer should normally use HMRC's Starter Checklist instead.

The practical difference is that providing the correct P45 promptly can make the transition between jobs much smoother and reduce the risk of temporary emergency taxation or incorrect PAYE deductions. (GOV.UK)

What Exactly Is a P45?

A P45 is a PAYE document issued when an employee leaves employment.

Your employer must give you a P45 when you stop working for them. The employer also reports your leaving information to HMRC through payroll, normally on the Full Payment Submission. (GOV.UK)

The P45 records key information about the employment that has just ended.

It includes your:

leaving date;

total pay from 6 April to the date you left;

Income Tax deducted during that period;

tax code at the date of leaving;

National Insurance number and other personal details. (GOV.UK)

The employer's payroll information also includes details relevant to Student Loan deductions. (GOV.UK)

The reason these figures matter is that PAYE usually operates across the tax year, which runs from 6 April to 5 April.

When you move from Employer A to Employer B halfway through that year, your tax position does not normally restart from zero simply because you changed jobs.

The P45 helps Employer B pick up the PAYE history from Employer A.

Why Is the P45 So Important?

Consider someone who works for one employer from April to August and then starts another job in September.

By September, the employee may already have:

received several months of taxable salary;

used part of their annual Personal Allowance;

paid Income Tax;

and accumulated year-to-date pay and tax information.

The new employer needs enough information to calculate PAYE correctly.

HMRC tells employers that a P45 normally provides the employee's leaving date, total pay and tax paid to date in the current tax year, Student Loan status, National Insurance number and existing tax code. (GOV.UK)

Without those details, the payroll system may initially have to rely on the employee's Starter Checklist and temporary tax-code rules until HMRC reconciles the information.

That is why the P45 is important: it helps connect the two employments into one continuous PAYE record.

A Simple Example

Maria earns £18,000 between 6 April and 31 August with Employer A.

Income Tax has already been deducted from her salary.

She leaves Employer A and starts with Employer B in September.

Her P45 shows the relevant year-to-date pay, tax and tax code.

She gives it to Employer B before the first payroll is processed.

Employer B can use those figures when setting her up on payroll rather than treating September as though it were the beginning of Maria's tax year.

This improves the likelihood that the tax deducted from her new salary reflects what she has already earned and paid during the year.

What Happens if You Do Not Give Your P45 to the New Employer?

You can still be employed and paid.

If you do not have a P45, your new employer should normally ask you to complete HMRC's Starter Checklist, which replaced the old P46.

The checklist gives the employer information needed to:

add you to payroll;

work out the tax code for your first pay;

calculate the Income Tax deduction;

deal with Student Loan or Postgraduate Loan deductions where relevant;

and report your new employment to HMRC. (GOV.UK)

So the absence of a P45 is not a disaster.

However, HMRC warns that if you change jobs without a P45, you might initially pay the wrong amount of tax. (GOV.UK)

Emergency Tax: Why the P45 Can Save You Problems

If your new employer does not have sufficient information about your previous income, you may temporarily be put on an emergency tax code.

For 2026/27, HMRC's standard emergency codes include:

1257L W1

1257L M1

1257L X (GOV.UK)

You may also see NONCUM depending on the payroll software.

The important part is W1, M1, X or NONCUM.

An emergency code does not necessarily mean that all your pay is taxed at an unusually high rate.

It means that your tax is generally being calculated using only the current week or month rather than taking your total pay and tax for the whole tax year into account. (GOV.UK)

That can cause you to pay too much or too little tax temporarily.

Providing the P45 gives the employer your previous PAYE information and can help HMRC and your new employer move you onto the correct treatment more quickly. (GOV.UK)

Example: The Difference Between Cumulative and Emergency Tax

Suppose an employee starts a new monthly-paid job in October.

Under normal cumulative PAYE, the payroll calculation can take account of the employee's tax position from earlier months of the tax year.

Under an M1 emergency basis, October is effectively looked at in isolation for PAYE purposes.

The employee receives only the relevant monthly slice of the tax allowances and bands for that payroll calculation rather than a cumulative year-to-date reconciliation.

If earlier earnings were unusually low or high, this can produce a different amount of tax from the cumulative calculation.

This is why someone can change jobs, receive the first payslip and suddenly ask:

“Why has so much tax been taken?”

The answer is often not that the new employer has deliberately overtaxed them. It may simply be that payroll did not yet have the complete PAYE history.

How Long Can It Take HMRC to Correct an Emergency Code?

When you start a new job, your employer reports the employment to HMRC when they first pay you.

If the employer does not have your previous income and tax details, an emergency code may initially be used.

HMRC says it will usually update the tax code once it receives the relevant information from the new and previous employers. This can take up to 35 days from the date you start the new job. (GOV.UK)

If more than 35 days have passed and the tax code still appears wrong, HMRC advises checking and updating your tax-code information.

Is 1257L Always an Emergency Tax Code?

No.

This is another widespread misunderstanding.

1257L by itself is not automatically an emergency code.

The code becomes an emergency code when it is operated with an indicator such as:

W1, M1 or X.

For example:

1257L — normally cumulative.

1257L M1 — emergency Month 1 basis.

1257L W1 — emergency Week 1 basis.

1257L X — emergency basis used where pay dates vary. (GOV.UK)

The employee should therefore look at the complete tax code shown on the payslip rather than seeing “1257L” and immediately assuming something is wrong.

What Do the Different Parts of a P45 Do?

A traditional P45 is divided into several parts.

The employee keeps Part 1A.

When starting a new job, the employee gives Parts 2 and 3 to the new employer.

HMRC's current employee guidance confirms that where the employee has a paper P45, only Parts 2 and 3 need to be given to the new employer; Part 1A should be retained. (GOV.UK)

Part 1A is worth keeping safely because it contains useful evidence of the employment and the pay and tax position when you left.

Even where payroll software generates the information electronically, the underlying purpose remains the same: providing the employee with their leaving PAYE information and giving the next employer the information needed to establish payroll correctly.

What Information Does the New Employer Actually Use?

The P45 is not merely proof that you previously worked somewhere.

For payroll purposes, it contains actionable tax information.

The new employer normally needs:

your full name;

National Insurance number;

the date you left your previous employment;

the existing tax code;

total taxable pay to date in the tax year;

total tax deducted to date;

Student Loan deduction information. (GOV.UK)

This information helps determine the tax code and the cumulative values transferred into the new payroll record.

What if the P45 Arrives After Your First Payday?

This happens frequently.

You may start a new job immediately after leaving the previous one, but the P45 reaches you after your new employer has already processed the first payroll.

The document can still be important.

If HMRC has not already issued a new tax code, the employer can use a late P45 to update the payroll record, including the appropriate total pay and tax to date information.

If HMRC has already sent the employer a tax code, the employer should use the code HMRC has issued rather than replacing it simply because a late P45 has arrived. (GOV.UK)

This means you should still give a late P45 to payroll rather than assuming:

“It is too late now, so it is useless.”

What if You Do Not Have a P45?

There are several legitimate reasons why someone may start a job without one.

You may be starting your first job.

You may be starting your first job in the UK.

Your previous employer may not yet have issued the P45.

You may have lost it.

You may be starting an additional job while keeping the first job.

In these situations, HMRC's Starter Checklist becomes particularly important. (GOV.UK)

Do not invent figures from memory and do not give your new employer another person's P45.

Complete the Starter Checklist accurately.

The Starter Checklist Is Not Just a Formality

The answers on the Starter Checklist can directly affect the tax code used on your first pay.

One of the important questions establishes whether the employment is:

your first or only employment;

a replacement for an earlier employment;

or an additional job while another employment or pension continues.

HMRC updated its guidance in February 2026 specifically to help employers use the correct starter declaration. (GOV.UK)

If the employee selects the declaration indicating that they already have another job or receive a pension, HMRC's current employer guidance says the employer should use starter declaration C and tax code BR where the completed checklist directs this treatment. BR means that income from that employment is taxed at the basic rate without applying another Personal Allowance to that job. (GOV.UK)

This helps prevent the same tax-free allowance being given twice.

Example: Starting a Second Job

Andrei already has a full-time job paying £35,000.

He keeps that job and starts a second job at weekends.

There is no P45 from the first employer because Andrei has not left that employment.

He should therefore not wait for a P45 that will never be issued.

Instead, he completes the Starter Checklist and states that he has another job.

HMRC's current guidance for the relevant starter declaration uses BR for that second employment where declaration C applies. (GOV.UK)

HMRC can subsequently adjust the code if Andrei's overall circumstances require a different allocation.

The key point is that the correct document in this case is the Starter Checklist, not a P45.

Why Having Two 1257L Codes Can Be a Warning Sign

HMRC currently advises people with more than one job to check their PAYE details online and make sure that only one employer is using the 1257L tax code at any one time. (GOV.UK)

Why?

Because the standard code usually gives access to the standard Personal Allowance.

If two employments both receive the full allowance when they should not, too little tax may be collected during the year.

The employee may then discover later that HMRC believes tax is still owed.

A second-job tax code is not automatically BR in every eventual circumstance—HMRC can allocate allowances differently—but seeing full allowances being duplicated is something that should be checked.

What if You Lost Your P45?

This rule surprises many employees.

HMRC states that if you lose your P45, or your employer says it was sent but you did not receive it, you cannot get a replacement P45. (GOV.UK)

Instead, you should complete a Starter Checklist for the new employer.

If you simply need the historical pay and tax information for another reason, you can view and download your pay and tax details for the previous five tax years through:

your Personal Tax Account, or
the HMRC app. (GOV.UK)

Those online details are extremely useful, but they are not the same as HMRC issuing a replacement P45.

What if Your Previous Employer Never Gave You a P45?

Your employer is required to give you a P45 when you leave. (GOV.UK)

If you have left and have not received one, ask the employer for it.

If you need to start your next job before the issue is resolved, complete the Starter Checklist so the new employer can still add you to payroll.

Do not delay starting work merely because the previous employer has been slow to issue the document.

What if the Figures on Your P45 Are Wrong?

You should not simply ignore an incorrect P45.

If the pay or Income Tax amounts are wrong, HMRC says you should ask the previous employer to correct the information and issue an amended P45.

If you cannot obtain an amended P45, you can tell HMRC through the Check your Income Tax online service. HMRC can then contact the employer regarding the incorrect details. (GOV.UK)

If the tax code shown on the P45 is wrong, HMRC says you should still give the P45 to the new employer. HMRC should normally correct the tax code after the first pay information is received. (GOV.UK)

If your personal details are wrong, HMRC advises completing a Starter Checklist and giving both the checklist and P45 to the new employer. (GOV.UK)

P45 and Student Loans

The P45 is also relevant beyond basic Income Tax.

Employer guidance states that the P45 includes Student Loan deduction status. (GOV.UK)

This helps the new employer understand whether Student Loan deductions need to continue.

The Starter Checklist also asks for Student Loan or Postgraduate Loan information when a P45 is unavailable or additional information is required. (GOV.UK)

This is another reason employees should not regard onboarding payroll forms as unimportant paperwork.

Incorrect information can affect not only Income Tax but also loan deductions.

P45 and National Insurance: An Important Distinction

The P45 includes your National Insurance number, but National Insurance does not operate in exactly the same cumulative way as Income Tax.

Income Tax under PAYE can take year-to-date earnings and previous tax into account where a cumulative tax code is being operated.

Employee National Insurance is generally calculated by reference to each earnings period and employment under the applicable NIC rules.

Therefore, handing over a P45 is particularly important for carrying forward PAYE Income Tax information, but it does not mean your new employer simply transfers a cumulative National Insurance total from the old employment and continues calculating NI in the same way.

This distinction helps explain why Income Tax may change noticeably after a job move while National Insurance follows a different calculation.

What Happens if You Receive Money From Your Old Employer After the P45?

Sometimes an employer discovers after issuing the P45 that another payment is due.

Examples include:

an unexpected bonus;

accrued holiday pay;

commission;

or a taxable termination payment.

The previous employer does not issue a second P45.

HMRC requires the additional payment to be dealt with as a payment after leaving. The employer generally uses tax code 0T on a Week 1/Month 1 basis, or S0T/C0T where the Scottish or Welsh prefix applies, and reports the payment through the FPS using the payment-after-leaving indicator. The employer must also give the former employee written details of the gross amount and deductions. (GOV.UK)

This means your final tax position can sometimes change even after the P45 has already been issued.

Does a P45 Expire?

A P45 is most useful when it relates to your most recent employment and provides information relevant to the PAYE year in which your new employer is processing you.

Employers are instructed to use a recent P45 and to obtain a Starter Checklist where an appropriate recent P45 is not available. (GOV.UK)

This is why you should give the new employer your most recent P45 rather than digging out a document from an unrelated employment several years earlier.

If you have more than one P45, current HMRC employer guidance says the employer should normally use the one with the latest leaving date. If two have the same leaving date, additional rules determine which one should be used. (GOV.UK)

P45 Versus P60: They Are Not the Same Document

The P45 and P60 are frequently confused.

A P45 is issued when you leave employment.

A P60 is issued when you are still employed by that employer on 5 April, the final day of the tax year.

The P60 summarises taxable employment income and tax for that employment for the year. Employers must normally provide it by 31 May. (GOV.UK)

Therefore:

Leave your job during the year → P45

Still employed there on 5 April → P60

You may receive both documents relating to the same employer at different stages of your employment history, but they perform different functions.

Example: P45 and P60 in the Same Tax Year

Elena works for Employer A until 30 September and then starts with Employer B.

Employer A gives her a P45 when she leaves.

She gives it to Employer B.

If Elena is still employed by Employer B on 5 April, Employer B will later provide her with a P60 for that tax year.

The P45 transferred her PAYE position between the two employments.

The P60 provides the year-end employment tax summary for the employment she holds at the end of the tax year.

Is a P45 Needed for Self-Employment?

No.

A P45 is an employment PAYE document.

A sole trader does not issue themselves a P45 when they stop a self-employed business.

Similarly, a CIS subcontractor who is genuinely self-employed does not receive a P45 simply because a contractor stops giving them work.

However, many people have both PAYE employment and self-employment.

For example, a construction worker may work as an employee for one company and later operate as a self-employed CIS subcontractor.

The P45 relates specifically to the PAYE employment that ended, not to the self-employed CIS activity.

What About Directors?

A director can also be an employee of their company for PAYE purposes.

If the director genuinely leaves employment and payroll with the company, the normal PAYE leaving procedures, including P45 requirements, can apply.

The fact that the person is also a shareholder does not turn the P45 into a different document.

However, director payroll and National Insurance can involve separate calculation rules, so a director's complete payroll position should be considered carefully rather than treating it automatically in exactly the same way as an ordinary employee.

How the New Employer Uses the P45 in Payroll

From the employer's perspective, the P45 is part of the new-starter process.

The employer uses the employee's details to establish the tax code and starter declaration in payroll software.

The new employee must be reported to HMRC on or before their first payday through the normal Real Time Information process. (GOV.UK)

Where the P45 carries a cumulative code and cumulative pay and tax figures, HMRC's PAYE manual explains that the employer normally operates PAYE using those figures in the usual way. (GOV.UK)

The information is therefore not simply filed away.

It affects the calculation.

Example: Why Giving the P45 Before Payroll Matters

Suppose Daniel starts a new job on 10 August.

The company's payroll cut-off is 20 August and payday is 28 August.

If Daniel provides his P45 on 12 August, payroll can potentially incorporate it before his first salary calculation.

If he gives it on 2 September, payroll has already processed August.

The P45 can still be relevant, but the first payslip may have been calculated using Starter Checklist information or a temporary code.

That can create an unnecessary month of confusion even if HMRC later corrects the position.

For employees, the practical rule is simple:

Give your P45 to payroll as early as possible—ideally before the first payroll cut-off, not merely before you receive your first salary.

Check Your First Payslip

Giving your P45 to the employer does not mean you should stop checking your payroll.

HMRC specifically reminds employees that it remains their responsibility to make sure they are paying the correct amount of tax. (GOV.UK)

On your first payslip, check:

your name and National Insurance number;

gross pay;

tax code;

Income Tax deducted;

National Insurance;

Student Loan deductions, if applicable;

pension deductions;

year-to-date taxable pay and tax where shown.

If the tax code contains W1, M1, X or NONCUM unexpectedly, investigate why.

Example: A P45 Does Not Guarantee the Tax Code Will Never Change

Suppose your P45 shows 1257L.

You give it to your new employer.

Shortly afterwards, HMRC determines that you also have another source of taxable income or an unpaid tax adjustment.

HMRC may send the employer a new tax code.

The employer must then use the code HMRC has issued.

A P45 gives the new employer the starting information from the previous employment. It does not override later HMRC coding notices.

HMRC can change tax codes when income or circumstances change, including when an employee starts a new job or has another employment or pension. (GOV.UK)

What if You Paid Too Much Tax Because of the Job Change?

If the tax code is corrected during the year and the code operates cumulatively, payroll may sometimes automatically refund excess PAYE through a later payslip.

In other cases, HMRC may need to reconcile the position.

HMRC reviews employment income information and can arrange a refund where too much tax has been paid. If too little tax has been collected, HMRC may adjust the tax code or issue a calculation after the tax year. (GOV.UK)

Do not assume that any unusually high deduction will definitely fix itself immediately.

Check the code and your HMRC record.

Use the HMRC App or Personal Tax Account After Starting

HMRC now encourages employees to monitor their employment details online.

Your new employment should normally become visible in HMRC's systems after payroll information has been reported. HMRC says new employment details can be available to view within six weeks after the first payday. (GOV.UK)

Using the PAYE section of your Personal Tax Account or HMRC app, you can check whether:

HMRC has all your current employers;

your estimated annual income looks reasonable;

and only one employer is using the standard 1257L code where appropriate. (GOV.UK)

This is particularly useful for people who change jobs frequently or have multiple jobs.

Common P45 Mistakes

Most P45 problems arise from simple mistakes rather than complicated tax rules.

An employee leaves the P45 unopened for several months.

Someone gives the new employer Part 1A but keeps Parts 2 and 3.

A second-job employee incorrectly claims they have stopped their first employment.

A person assumes the P45 itself guarantees the tax code is correct.

Someone loses the P45 and waits indefinitely for a duplicate that cannot be issued.

An employer ignores a late P45 even though HMRC has not yet issued a code.

Or an employee sees 1257L and assumes it is emergency tax without checking whether W1, M1 or X appears after it.

Each mistake can create unnecessary payroll problems.

Practical Procedure When Changing Jobs

The process does not need to be complicated.

When leaving your old employment, check your final payslip and ask when your P45 will be provided.

When the P45 arrives, verify your name, National Insurance number, leaving date, pay, tax and tax code.

Give the relevant P45 information to the new employer as early as possible.

If you do not have a P45, complete the Starter Checklist accurately instead.

After the first payday, check your tax code and deductions.

If something appears wrong, do not leave it for six months. Raise it with payroll and check your PAYE details through HMRC.

Final P45 Checklist

Before and after changing jobs, check:

Did your previous employer issue your P45?
Is the leaving date correct?
Are the pay and tax figures reasonable compared with your final payslip?
Is your National Insurance number correct?
Have you given Parts 2 and 3, or the relevant P45 information, to your new employer?
If you do not have a P45, have you completed the Starter Checklist?
If this is an additional job, have you declared that you still have another employment?
Have you checked your first tax code for W1, M1, X or NONCUM?
Are Student Loan deductions being handled correctly?
Have you checked your HMRC PAYE account after the new employment has been reported?

Verdict: Is the P45 Really “Vital”?

Yes—but with an important qualification.

The P45 is vital information, not an absolute condition of starting a new job.

Its importance comes from the fact that it transfers key PAYE information from your old employment into the new-starter process.

It tells the new employer what you have already earned, how much Income Tax has already been deducted and which tax code was previously being operated.

Giving it to the new employer promptly can reduce the likelihood of emergency taxation, incorrect cumulative figures and delays while HMRC reconciles your employment history. (GOV.UK)

But if you do not have a P45, you should not panic and you should not delay starting work.

Complete the Starter Checklist accurately.

The Golden Rule

When you change jobs, give your new employer your P45 as early as possible. If you do not have one, complete the Starter Checklist immediately—and always check the tax code on your first payslip.

How DCTaxAgent Can Help

DCTaxAgent can assist employees and employers with:

PAYE and payroll queries;

checking P45 information;

new-employee payroll setup;

Starter Checklists;

emergency tax codes;

incorrect PAYE deductions;

multiple employments;

Student Loan deductions;

tax-code reviews;

P45 and P60 queries;

PAYE reconciliations;

tax refunds where too much tax has been deducted;

employer payroll administration;

and contacting HMRC where PAYE information needs to be corrected.

WhatsApp: 07587 532646
Website: www.dctaxagent.co.uk

Disclaimer

This article is intended for general informational and educational purposes.

It does not constitute personalised tax, employment-law, payroll, legal or financial advice.

PAYE treatment depends on the employee's employment history, tax code, previous pay and tax, additional jobs, pensions, taxable benefits, Student Loan status and other circumstances.

A P45 is extremely useful when changing jobs, but an employee without one can normally be set up through HMRC's Starter Checklist.

The information reflects official HMRC and GOV.UK guidance available on 7 August 2026.

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