PAYE61010 - Employment maintenance: create employment: P45 part 3 overview

Employers are required by law to notify HMRC when an employee starts in their employment.

If the employer is not in RTI they complete form P45 Part 3 and send it in to their Processing Office.

Some employees do not immediately hand their P45 to their new employer, or choose to withhold it as they do not want their employer to know about their previous employment. In these circumstances the employer will use form P46 to notify us of the employee’s commencement.

Note: If the employer is within RTI the starter information is included in their Full Payment Submission (FPS).

When notification of a change in employment is provided, it is important that the information is given prompt attention and the appropriate actions taken. This ensures the correct code can be issued to the employer should the individual query their code. Failure to do this could mean the individual may pay more tax than necessary which can lead to complaints.

Employers play a vital role in helping the PAYE system work effectively. The Department is committed to providing more help and guidance to employers. If you work on Employment Maintenance you can help to raise the profile of this area of work by being proactive in maintaining good relationships with employers.

It is important that where you find problems, you try to contact the employer to resolve them - refer any difficulties to your Manager. Examples of problems are

  • Neglect or delay in sending in forms P45
  • Failure to operate the correct code
  • Incorrect operation of the tax tables leading to tax discrepancies

You should refer details of employers who persistently fail to comply with their obligations to your manager to consider if the case should be referred to your Employer Compliance Teams for compliance reviews.

To conform to legislation, HMRC must ensure that computer systems are not being used unless there is a legitimate business need. This applies equally to viewing records as it does to updating them. An audit trail is created each time a user accesses a record and any unauthorised or inappropriate accesses will be considered for action under the Department's Conduct and Discipline rules, and may also constitute a criminal offence.