How to handle a late P45

As of 28th July 2022, HMRC guidance has been updated to remove the employer requirements around the late receipt of P45s from employees, where it's too late to be applied to the first payment.

New guidance

When adding a new employee to your payroll system, you should use their P45 information to record their previous pay, tax and student loan (if applicable). If the employee does not have a P45, you can use the starter checklist available below:

After the starter checklist is added and submitted on your full payment submission (FPS), only use any tax code or previous pay or tax changes received directly from HMRC.

If you use the starter checklist to add the employee to your payroll records and you receive the P45 after you have received a tax code from HMRC, you do not need to update the previous pay, tax, or tax code on your payroll software, only update student loan details (if applicable).

To add a Student Loan to an employee, you will need to:

1. Select the Employees section from the left sidebar.
2. Select the relevant employee to view their employee profile.
3. Select the Pay items tab.
4. Select Add pay item.
5. Select Student loans from the list of Schemes.
6. Toggle on the correct Plan type.

For more information on Student Loans, please see the following article Student Loans

If you haven’t received a tax code update from HMRC, you will need to update this information to reflect the P45.

To amend an employee's tax code, you will need to:

1. Select the Employees section from the left sidebar.
2. Select the relevant employee to view their employee profile.
3. Select the Taxes tab.
4. Enter the correct details as per the P45.
5. Press Save settings.

Frequently Asked Questions

A new Employee has provided their P45 after their first pay run, what tax code should I use?

If the P45 is in date i.e. from the current tax year, then you should update the tax code on Pento to match the P45, unless HMRC have issued a code prior to the employee providing their P45. HMRC generated tax codes always take precedence over the P45.