A P45 is the reference code of a form titled ‘Details of employee leaving work’ that is issued by an employer when an employee leaves. It is used when an employee ends or starts employment with a company and allows each company and the Revenue and Customs to accurately calculate tax for the year. It contains details about earnings and tax paid during the tax year.
The form is in a number of parts;
- The front section, Part 1 is given by the employer to HMRC who record the pay and tax details on the tax payers record.
- Part 1A is retained by the employee.
- Part 2 is retained by the new employer.
- Part 3 taken by the new employer and sent to their tax office.