Set yourself up as an employer

Dealing with a new employee's P45

The P45 is a certificate providing details from your employee's previous job. Your employee must keep the front page (Part 1A) of the P45. You need Parts 2 and 3.

Download form P45 from the HM Revenue & Customs website (PDF).

Before you start
Make sure you have the New Employer's Starter Pack available. This includes the help book on day-to-day payroll - the section "A new employee gives you a form P45" gives full details of what to do. See the page in this guide on the New Employer's Starter Pack.

Call the HM Revenue & Customs New Employers Helpline on Tel 0845 60 70 143 if you need help with the P45.

Check the P45
Look through the details on the P45, especially these:

Item 2 - does it contain a valid National Insurance (NI) number? It must have two letters, six numbers, then A,B,C or D - for example AZ 12 34 56 C. If the NI number is missing, or in the wrong format, check with the employee. If they don't know their NI number, complete the employee's NI number trace form (CA6855) supplied on the starter pack CD-Rom.

Items 6 and 7 - are these details the same on part 2 and part 3? If not, call HM Revenue & Customs New Employers Helpline at once.

See an example of a completed P45 on the HM Revenue & Customs website.

Complete part 3
Fill in part 3 of the P45. You'll find your employer reference (item 8) in your starter pack.

Record the employee's details
Use the details from the P45 to create a payroll record for the employee - this is the record you'll use when you come to calculate pay and deductions. See the page in this guide on choosing a payroll system.

When you've recorded the details:

• Separate parts 2 and 3 of the P45. Send part 3 to HM Revenue & Customs immediately - you'll find the address in your starter pack.
• Put part 2 somewhere secure - you must keep it for at least 3 years.

Subjects covered in this guide

• Introduction
• Who counts as an "employee"?
• First steps in taking on a new employee
• The New Employer's Starter Pack
• Dealing with a new employee's P45
• What if my new employee doesn't have a P45?
• When a new employee doesn't have or know their NI number
• Choosing a payroll system
• Operating the payroll manually
• Using payroll software
• Arranging payment for your new employee
• Paying your employee for the first time