What is a P45?
A P45 is a document that an employee receives from their existing employer when they leave a job. The employee can receive an electronic or paper copy from their old employer. It provides tax and payroll information that an employee can pass onto their new employer and also keep for their own tax records. Her Majesty's Revenue and Customs (HMRC) used to be issued with a paper copy as well, but now this is sent as an electronic payroll report. This process is known as RTI (Real Time Information).
The employee sends a copy to the new employer to input the data into their payroll system and notify HMRC electronically.
Why would I receive a P45 from Smart if I am not employed by them?
When you claim the pension savings that are currently held with Smart, you are in effect ending your current membership with us. If you take the whole fund as a lump sum, part of this fund will be treated as taxable earnings and will need to be reported to HMRC. You will therefore receive a P45 for your own records and also to pass on to a new employer if you are continuing to work.
What information is on a P45?
Existing information about the member
Taxable earnings that have been received so far this tax year and any tax paid
Tax code used for the member benefits received
The old employer’s PAYE (Pay As You Earn) tax references
The information included in the P45 will enable a new employer to update their payroll software to ensure that the member continues to be taxed at the correct rate.
P45s don’t show National Insurance deductions or pension contributions, so it may be useful to keep copies of final payslips, in case they are needed to trace a member when they reach retirement.
How do I get a P45?
If your old employer or pension provider has not sent you one, you can request one. There may be a delay until after their final payroll has been processed. If you are starting a new job before receiving your P45, you can complete a starter checklist that your new employer can then input into their payroll system. This will allow your new employer to calculate a temporary tax code until they are notified of your new tax code by HMRC.
How long after payment before I will receive my P45?
Your P45 will be issued within one or two business days of your payment being made. This will be sent to you electronically by email so it is important that we have your correct email address on our records. It could be sent via a paper copy if we do not have your email address, but this will usually take 5 - 10 working days longer to reach you.
Can I get a copy of my P45?
It is not possible to provide a duplicate of your P45 as this is an official document however, we can provide you with a letter that will detail the same information and will be accepted by HMRC.
Can I view my P45 online?
A copy of your P45 will not be available, but the information provided in it can be viewed by signing into your personal tax account on the Government gateway. The Government gateway is a central place where you can register to use online government services. Once you have registered you can use the ID and password you received when you signed up to access lots of services, including many of HMRC’s digital services.
How long is a P45 valid for?
Your P45, like all tax records, should be kept for six years from the end of the tax year that they relate to. It is important to know that HMRC can carry out retrospective checks up to 20 years, so it is useful to keep hold of it for longer in case any queries arise. The P45 you receive from your employer must be for the current tax year and not a previous tax year. Details about the tax paid in a previous tax year will be included in a document called a P60.
Key differences between a P45 and a P60
Provided by former employer after employment ends and given to new employer (copy should be kept by employee)
Provided by current employer each year (there may be more than one employment)
Pay and tax information for the current tax year up to the date of leaving
Pay and tax information for the whole of the previous tax year (6 April - 5 April)
Information as at final payroll date
Information as at 5 April
National Insurance contributions not included
National Insurance contributions are included for the whole of the tax year, but for the current job only
Both P45 and P60 are important for proving salary and tax paid and should be retained by the employee and employer for at least six years.