Ian Holloway outlines limitations of the form P45 and suggests that HMRC should consign it to the legacy form dustbin.
Employers complete PAYE form P45 for the leaving employee. In HMRC’s ideal world, a new employee presents their P45; the tax code, previous pay and tax and pay are then brought forward from the previous employment. P45 purpose fulfilled!
Unfortunately, this Eldorado world and the real world are not aligned. Frequently, an employee does not give a P45; maybe it has not been issued by the previous employer in time for the first pay run. So, employers issue the ‘Starter Checklist’, or at least ask the employee to complete the checklist questions.
Matching employer, employee and HMRC expectations
There are two things employers, employees and HMRC want the first time information is submitted on the employer’s real-time
