Date of leaving on P.45

Date of leaving on P.45

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My question relates to an employee who ceased work on Friday 31st July. Our payroll runs weekly in arrears, so we are processing the final pay week commencing 3rd August, with actual payment to the employee bank accounts on Friday 7th August.

Our payroll processing bureau insists that the date of leaving on the P.45 should be the 7th August; the day on which they receive their final payment...This goes against all my years of training and understanding of payroll as I believe it should be the date their employment ended; the 31st July. The bureau says it's due to the introduction of Real Time Information (RTI) and how the Sage 50 software processes the data.

Please help, as the bureau is a firm of accountants and they've checked it with their senior tax partner and he agrees with them, so where and when did things change?

Thank you.

Robert.

Replies (14)

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By hje
04th Aug 2015 10:23

The date

should be the date on which the employment ended.

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By Sandnickel
04th Aug 2015 10:33

payroll has always been calculated on the payment date

If your employee left on the 31st he should have been paid on that date in full to end his employment. The software (correctly) can't issue a P45 for a payment that has not yet been made.

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Replying to Tax Dragon:
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By Kazmc
04th Aug 2015 10:37

not always...

Sandnickel wrote:

If your employee left on the 31st he should have been paid on that date in full to end his employment. The software (correctly) can't issue a P45 for a payment that has not yet been made.

Not if they are paid a week in arrears.

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By Kazmc
04th Aug 2015 10:36

Rubbish

We used Sage 50 up until the end of 14/15 and you can input whichever date you want which should be the date the employment officially ended, RTI makes no difference and will not stop any submissions going through. Your payroll providers may have been given incorrect information by Sage helpdesk as they are terrible, hence moving away to IRIS!

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RLI
By lionofludesch
04th Aug 2015 10:46

Not uncommon

It's not uncommon for folk to be paid sums after they've left.  Sometimes you just don't know how much to pay someone at the time they leave.  Week in hand pay, commissions, whatever...

Strictly, I would say that the date of leaving is the last day they work.

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By Sandnickel
04th Aug 2015 10:53

I will repeat

It's often something that accountants get wrong with accruals etc on the brain. The payroll is calculated on the date of payment. Think about the year end. If it crossed over 5th April you would be paying one week in the new tax year. How could you issue a P45 with a previous year date on it in this scenario? The software is correct.

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By Kazmc
04th Aug 2015 11:01

but surely...

The P45 would still be issued correctly as the final pay period would be in the correct tax year (and subsequently the FPS would be submitted ok), it would just be the date of leaving that would be from the previous year and that doesn't affect the P45?

I have always thought and been taught that the date of leaving should be the date the employment contract ended, but I stand to be corrected.

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RLI
By lionofludesch
04th Aug 2015 11:02

Second P45

Strictly, in such a case, you should issue a second P45, using code BR.

Still, let's face it - in 51 out of 52 weeks, it just makes no difference.

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By John Webb
04th Aug 2015 11:04

the bigger issue

is making sure the P45 states the date they left - otherwise the ex employee can make a claim for additional unused benefits like accrued holiday pay.

This happened recently at a client of mine and the HR lawyers had the final say. The date of leaving on th P45 is the date they left/stopped accruing pay.

Imagine if they left on 30th July and then company voted a bonus for all on 31st, ex employee got wind of it and noted his P45 says "date of leaving  5th August" - you can bet your bottom dollar he/she would try and clam some bonus

 

 

 

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By Marion Hayes
04th Aug 2015 11:31

Emplpoyers Further Guide to PAYE and NIC

the Employers guide says treatment of payment depends on its nature.

~If it is the regular, usual earnings and no P45 yet given then date of leaving is 31 July, you still process the last payment on the same payroll record and the P45 will have full details on it.

If you have already issued P45 or payment is not the usual weekly/monthly payroll then you start a second record and apply 0T mth 1.

I had the same situation last month where they are paid weekly in arrears. Moneysoft accepted the contractual leaving date, payment one week in arrears, and successfully filed the RTI return. It did warn me I was paying after leaving date but did not impose any restrictions.

Edit: It also tells you how to deal with the last payment crossing over into the next tax year by the way.

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By dylantherabbit
04th Aug 2015 13:29

For clarity

There seems to be a difference of opinion among the group, so to clarify matters;

This is the regular weekly pay being paid in arrears for the period up to the 31st July, plus remaining holiday. NO previous P.45 has been issued.

The date of payment into the employees bank account for this final pay period will be the 7th August.

Can we all agree that the leaving date on the P.45 should be 31st July? That is the date their contract of employment ended. The payment date is relevant only for determining the tax week.

 

 

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By Kazmc
04th Aug 2015 13:33

That Is

That is what I would do.

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By Agubis
04th Aug 2015 13:45

The leaving date is not the payment date

The leaving date is not the same as the payment date, even if you pays in arrears. If your payroll bureau is giving you such an info, probably it is time to change your payroll services provider.

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By Thimble37
02nd Feb 2016 22:02

date of leaving on p45

My daughter is having the exact same issue now.  She left her previous job on 13 February 2015 (monthly pay) and started her new job on 17 February 2015 (weekly pay)  However she didnt received her final salary until 5 March 2015 (three weeks after leaving)  Obviously by the 5 March she had received two weekly wages from her new employer.  She has now received three letters from the HMRC to say she owes tax as the records on her P45  with a last employment date being 5 march as final payment date, suggesting  she had two employers.  Despite her P45 and P60 showing tax has been paid.  After numerous calls to HMRC she is still unsure just what is going on.  To add to the utter confusion the HMRC have also sent a cheque for over half the amount they say she actually owes.  As you may imagine for a younger person just starting out this is now causing considerable stress. 

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