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March 2012 P45 received in April 2012. How to deal with this?

March 2012 P45 received in April 2012. How to...

Employee started job on 21/3/12. No P45 given, so BR tax deducted on 31/3/12.

P45 now received in April. Had it been received on time in March, no tax would have been deducted.

How can the tax paid in March be recovered in April, seeing that it's a new Tax Year? Or should the employee complete a SA Return?



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01st May 2012 23:05

No to both

He needs to send a copy of his P45, and your P60, to HMRC with a repayment request under the normal PAYE section reference.

There is no need to complete a return unless there are other reasons to do so.

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02nd May 2012 11:22

Why was code BR used?

If the employee arrived without a P45, he should have been given a P46 to complete.  He would have ticked Box B to say that he had had another job since the previous 5th April, but that this was now his only job.  In that case, you should have applied the emergency code, 747L on a Month 1 basis.  As that allows £623 of pay tax-free in March (assuming a monthly payroll), he may well have had no tax deducted for 8 days (assuming a 5-day week) of pay.

If you don't follow the official PAYE procedures, you often end up getting it wrong and having to rectify the situation by submitting a repayment request, as Marion says.

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02nd May 2012 17:33

I Concur.

Its pretty straight forward enough to get them to sign a P46 on their first day of work, ticking box B so that they can be put on the normal tax code on a month 1/ week1 basis (810L this year 2012-2013). 

A new employee would only be put on BR tax code (and even then on a W1/M1 basis), if they have another job or receive a state pension at the same time.  But this is after they have signed a P46 ticking statement C.

If you do not know the status of the employee then they would be put on code OT W1/M1, whilst you where waiting to find out.

But I personally would keep a check on this, as once you notify HMRC that they are working for you, they usually send out a P6 by email, letting you know what tax code to put them on, and what pay they have received this year and tax deducted etc.  If you don't hear from them, I usually chase it up by a phone call.

You can download a P46 for completion from HMRC website, but remember that these forms have to be submitted on-line through your software package and not posted in.

Courses are often run for employers running payrolls by both HMRC, and there are companies that advertise them.  Business Link are quite good at helping too.  Why not have a look in your local area.

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