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HMRC internal manual

PAYE Manual

Employment maintenance: create employment: P45 part 3 employer responsibilities

When an employee starts in employment the employer must ask for Parts 2 and 3 of form P45 given to the employee by any previous employer (or by the Department for Work and Pensions if the employee was previously unemployed and claiming Jobseeker’s Allowance).

Where the employee produces a form P45 a non RTI employer, who is exempt from filing online must

  • Check that items 1 - 7 on the two parts of the form agree
  • Check that the total tax to date (item 7) for the week or month number shown on the form agrees with the Tax Tables. Where there is a discrepancy the employer

    • Deducts tax by reference to the Tax Table figure
    • Enters this figure at item 13 of Part 3
  • Complete Part 3 and send it immediately to the responsible Processing Office
  • Prepare a Deductions Working Sheet and deduct tax using the code and other details on Part 2
  • Keep Part 2 of the P45 for at least three tax years after the end of the tax year it is for, for audit purposes

If the employee starts work shortly after 5 April, Parts 2 and 3 of form P45 may relate to the previous year. Where this happens the employer will act in accordance with the instructions in the employer annual pack as follows

  • If the employee is employed before 24 May the employer will

    • Use the code shown on form P45, amended where appropriate by the instructions on form P9X for that year, and treat the pay and tax as Nil. Where the code is amended because of the P9X, it is to be entered at item 12 on the P45 Part 3
  • If the employee is employed after 24 May the employer will

    • Use code Personal Allowance on Week 1 / Month 1 basis instead of the code on form P45
  • Where a non RTI pension paying body receives form P45 from a new pensioner they must

    • Use the code on form P45 on a Week 1 / Month 1 basis
    • Complete P45 Part 3 and / or alternatively a P46(Pen) and send it to the Processing Office

An employee may not give form P45 to a new employer because

  • The last employer did not provide one
  • It has been lost
  • The employee was previously self-employed or at school or college
  • The employee does not want the new employer to know what the earnings from the previous employer were or what the code was


  • Some other reason

In these circumstances the employer must notify the Processing Office of the start of the employment using form P46. For more information on forms P46 see ‘Receipt of form P46’ at PAYE61035.

Where the P45 Part 3 shows a tick in the Continue Student Loan Deductions box the employer will start to make Student Loan deductions in advance of the formal notification on form SL1.

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