With RTI both P45’s and P46’s are still as valuable as ever. However the HMRC has produced a single page form P46 called ‘P46 (Short)’ which can be used by employers to gather information from new employees who don’t have a P45 from their previous employer.
The ‘short’ in P45 (short) refers to Section 2 (employer information) having been removed.
The form is available to download on the HMRC website and can be filled in on-screen or printed.
With Real Time Information an employer is no longer be required to submit P45 and P46 information to HMRC before the pay is calculated or send them the hard copy in the post. Instead, this information is included in the Full Payment Submission (FPS) which the employer submits online to HMRC covering the first payment of the new employee’s wages.
Under RTI, any new employee without a P45 should be asked to check which one of the following statements applies to them:
- A – This is their first job since last 6 April and they have not been receiving taxable Jobseeker’s Allowance, Employment and Support Allowance, taxable Incapacity Benefit, state pension or occupational pension. Use 944L Tax Code.
- B – This is their only job, but since last 6 April they have had another job, or have received taxable Jobseeker’s Allowance, Employment and Support Allowance or taxable Incapacity Benefit. They do not receive a state or occupational pension, use 944L W1M1Tax Code.
- C – They have another job or receive a state or occupational pension, Use BR W1M1 Tax Code
- However if they don’t fill out a P46 then they should be put on a 0T W1M1 tax code.
Not only does the employer need to keep a record of their new employee’s statement, but using this form will mean that all the employee’s core information is recorded on one document at the start of their employment.
If the employee doesn’t provide a P45 or fill out a P46 before their first pay day they should be taxed on all their earnings and not benefit from any tax free allowance.
Getting your new employees to fill out a P46 when they start with you makes you a great employer that looks after their employee’s welfare and don’t worry if an employee provides a valid P45 at a later date you can still process this information.
So remember with every new employee provide get a P45 or P46 and become a great employer.
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