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HMRC internal manual

PAYE Manual

Employment maintenance: create employment: receipt of form P46

The purpose of the form P46 is for non RTI employers to tell HMRC that an employment has started and what initial tax code is being operated. It is important that these forms are given prompt attention so where possible a correct cumulative code can be issued as quickly as possible.

Failure to do this means that the taxpayer may pay more tax than necessary which may cause financial hardship. This can lead to Customer Service complaints.

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

When you receive a P46 use the DATA CAPTURE screen to capture the details from the form, see PAYE60015. Before you can capture the information on the form, you may need to make various checks. These checks include

  • Making sure that you have the correct employer reference PAYE60016
  • Checking that the employee has ticked the appropriate statement

Where more than one or a combination of Statements has been ticked the form should be returned to the employer or the pension provider for the form to be correctly completed.

Also check whether the individual has just returned to the UK. If there is an entry in the ’Leaving the UK’ field on the Individual Summary screen, and nothing in the ‘Returning to the UK’ field, you need to complete the ‘Returning to the UK’ field with the date the individual returned to the UK or the date the employment commenced.

The first time an employment is created the computer will automatically issue a form P290(T). This form is a reminder to the taxpayer to de-register savings (where necessary) from receiving interest paid without deduction of tax.