A P45 is a document issued to an employee leaving their employer in the UK. It ensures that the employee has the correct tax code at their next job.
A P45 is a document issued by employers in the United Kingdom to Employees who have finished working with them. It contains information about the employee's Tax Code and National Insurance contributions
There are 4 parts of a P45 that each have different roles. Part 1 of a P45 is sent to HMRC. Part 2 and 3 is given to your new employer or to Jobcentre Plus if you are not working. And, Part 1A is held by the employee for their own records.
A P45 is crucial as it ensures that the employee will be put on the correct Tax Code at their new place of employment. Otherwise, you might end up paying too much tax. A P45 may also be needed for Self-employed individuals when filing a Self Assessment.
An example of a blank Part 1A P45 form is shown below:
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