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Leaver P45s

Leaver P45s

 HMRC's website has a faq:

Q. Do I need to issue a P45 to every employee who leaves?

A. You must complete a P45 for any employee who is leaving your employment and for whom you have completed a P11 deductions working sheet in the current tax year. You have a legal obligation to do this. The exception to this is when you have only used tax code 'NI' (used when a student is signing a P38(s) declaration).

I take that to mean if you have an employee (e.g. casual) who has not worked in the current tax year, then there is no need to issue them with a P45.

My payroll software does not allow 'nil' P45s to be filed online, so up to now I've been manually entering them on HMRC's website (!), which now seems unncessary.

My question is what do other people do in this scenario? Surely it's better if HMRC know the person is no longer on your books, so they don't send any more tax codes etc. The employer helpline says they will pick this up when the employee starts elsewhere.

Also, the point at which the employee is 'off the books' in the abscence of a leaver P45 is a bit vague - presumably employment law would apply, and the employer best send the (casual) employee a letter.


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By stt
26th Oct 2011 17:51

PAYE regulations 2003/2682 state...

36(1)  On ceasing to employ an employee in respect of whom a code has been issued, the employer must complete Form P45.

which contradicts the faq? a code could have been issued years ago.

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27th Oct 2011 12:37

ITEPA 2003

Reg.2, Interpretation, says:

""employment" ... has the meaning given in ss. 4 & 5 of ITEPA 2003; and "employer" and "employee" have corresponding meanings;"

s.4 ITEPA 2003 refers to "any employment under a contract of service".  A casual worker who has not worked in the current year can hardly be said to be an employment under a contract of service, so it is presumably this clause which overrides Reg.36(1).

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By stt
to Flying Scotsman
27th Oct 2011 12:53


Thanks Euan, but if there was a contract of service (written or verbal, though of course employment law requires some minimum written terms) in the past, why would it end just because someone has not worked for a while (unless there was some condition in the contract that determined termination of employment after a set period of inactivity)?

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