What a P45 really is and why it matters when you leave a job
A P45 is an important document you should receive when leaving a job. It records your pay and tax information and helps prevent being taxed incorrectly in your next job.
What a P45 really is and why it matters when you leave a job
When you leave a job, your employer should give you a document known as a P45. Many people misunderstand what it is for, how it is used, and what happens if they don’t receive one. While it may seem like just another piece of paperwork, a P45 is essential for ensuring that your next employer taxes you correctly.
This article explains what a P45 includes, why it matters, when you should receive it, and what to do if it is missing. This is general informational content and does not assess your personal circumstances.
What exactly is a P45?
A P45 is an official document issued by your employer when you leave a job. It shows:
- How much you’ve been paid so far in the tax year
- How much Income Tax has been deducted (PAYE)
- Your tax code
- Your National Insurance number
- Your employer’s PAYE reference number
It helps your new employer make sure that tax deductions continue correctly and helps HMRC maintain accurate records.
Source: HMRC — P45 guidance
https://www.gov.uk/p45
When should you get a P45?
You should receive your P45 on or shortly after your final working day. It does not matter whether you resign, are made redundant, or are dismissed — as long as you have been paid under PAYE, your employer must issue it.
It normally comes in paper form or electronically, and it must be provided without you having to request it.
What does a P45 look like?
A P45 is split into multiple parts:
| Part | Who receives it |
|---|---|
| Part 1 | Sent by employer to HMRC |
| Part 1A | Given to you to keep for your records |
| Part 2 & Part 3 | Given to your new employer or Jobcentre Plus |
You keep Part 1A, while Parts 2 and 3 are for your next employer so they can set up your new payroll correctly.
Why is a P45 important?
1. It helps avoid emergency tax
If your new employer does not have your P45, they may have to place you on an emergency or incorrect tax code, which typically results in higher tax deductions.
2. It confirms your taxable earnings for the current tax year
The P45 shows how much tax you have already paid, which helps HMRC calculate whether you have paid too little or too much.
3. It is required when applying for certain benefits
If you claim Jobseeker’s Allowance or Universal Credit after leaving a job, a P45 may be required to show your final earnings.
Source: HMRC — Leaving a job
https://www.gov.uk/employee-leaving
What happens if you don’t receive a P45?
If your employer does not provide a P45, you should remind them — it is their legal duty to issue it. Employers cannot withhold it because of unpaid equipment, notice disagreements or disputes.
If it still isn’t provided, your new employer will ask you to complete a Starter Checklist (previously called the P46). This helps HMRC establish your correct tax code.
Source: HMRC Starter Checklist:
https://www.gov.uk/new-job-tax-code
Can you start a new job without a P45?
Yes, you can start working, but your tax may not be set up correctly. You will usually be given a temporary tax code until HMRC processes your information.
You might later receive a tax refund or be asked to pay more if the wrong tax was initially deducted.
Do you need a P45 if you go self-employed?
No. If you leave employment to become self-employed, you do not need to give your P45 to anyone, but you should keep it for your tax records. It will help you complete your first self-assessment tax return.
How long should you keep your P45?
HMRC recommends keeping P45 records for at least 22 months after the end of the tax year. If you complete a tax return or are self-employed, you may need to keep it for longer.
Key points to remember
- A P45 is issued by your employer when you leave a job.
- It records your pay, tax and tax code for the current tax year.
- Your new employer uses it to calculate the correct tax deductions.
- Not receiving a P45 can lead to emergency tax being applied.
- If you don’t get one, you can use a Starter Checklist instead.
This information is for general educational purposes. It does not provide legal or financial advice and does not assess your personal position. Contact HMRC or a qualified adviser if you are unsure about your situation.
