Employer FAQ – P45 and P46 ProceduresMonday, December 22nd, 2008
HMRC questions and answers (Part 2)
(Reproduced from the December 2008 issue of Notes for Payroll Software Developers. The use of “we”, “us”, “our” etc in the answers applies to HMRC.)
- I’ve received a P6 notice of coding for a new employee before the P46 has been sent. Do I still need to send it?
Yes. If exceptionally you receive a P6 coding notice before the P46 has been sent, (perhaps because your employee has contacted the tax office before it has filtered through your payroll) you must still send it to us and complete the ‘tax code used’ field on it with the code from the P6.
- I’m a pension provider and make payments to a beneficiary on behalf of a deceased pensioner. What personal information do I enter on forms P45/P46/P14?
When you pay either an annuity or pension to a dependant or beneficiary of the deceased you should follow the procedures outlined in Helpbook CWG2(2008) Employer Further Guide to PAYE and NICs (para 21). In all cases form P46 (form P46(Pen) from April 2009) should be sent to your HMRC office in respect of each dependant or beneficiary. The emergency code on a week one or month one basis should be used. A form P11 should be prepared for PAYE purposes only and form P14 should be submitted at the year end.
- I’m a pension provider and will be making payments to a personal representative on behalf of a pensioner. Whose address should be shown on forms P45/P46/P14?
You should make every effort to obtain the postal address of the pension recipient as HMRC do not want personal information to be sent to the wrong customer. The address we hold on our records will be the address we use if we need to send a coding notification or Tax Return. A pension recipient must forward written authorisation on form 64-8 to HMRC nominating a personal representative to act on their behalf if they are content that this should happen. Whilst the address on starter notifications in mandatory, the address on form P45 Part 1 and P14 is optional.
- Why is the employee’s address so important and what do I do if I don’t hold a full address within my Payroll records?
Income Tax (PAYE) Regulations 2003 (Paras 42 & 46) state employers must provide us with an employee’s address when they notify us of an employee starting employment.
It is up to employers to decide how they want to get any missing address information. HMRC cannot advise on how this should be done. However some employers have told us that they find the Royal Mail website useful in helping them trace address details where the information provided by the employee is incomplete.
The employee’s address is important to us as it helps us to correctly identify the employee’s tax record and check the correct code number is being operated. The address you supply on starter notices (forms P45 and P46) overwrites any address we hold on our system which is why you need to obtain this information before sending these forms. It is very important that we have the correct current address of your employees.
The address supplied on form P45 Part 1 does not overwrite the address held on our records, but it is still useful to us as it helps to identify and match the P45 Part 1 details to the correct employee.
- I want to merge all or part of a PAYE scheme together following the merger or partial merger of two companies. How do I send the relevant employee information?
The term ‘merger’ has different meanings when used in relation to business mergers and PAYE scheme mergers. A business merger does not necessarily result in a PAYE scheme merger. It is important that you firstly distinguish which is the correct procedure for your business. Details can be found on our website at www.hmrc.gov.uk/manuals/pommanual/PAYE30010.htm
On identifying the correct procedure you may need to discuss with your office contact the most effective way of providing employee details to us if necessary.
- I’ve sent a P45 Part 1 for someone who I thought had left, but they haven’t. What should I do now?
If you send a P45 Part 1 to us in error you should immediately send a letter to your PAYE tax office confirming the P45 was sent by mistake. You should also destroy all other parts of the form.
- How should I complete a P45 Part 1 when the Date of Leaving and the date of the last payment are different?
The P45 Part 1 should always reflect the week or month number and the tax code used in line with the pay and tax calculations. For further guidance about tax codes you should always refer to the annual or Budget code instructions (forms P9X and P7X). The Date of Leaving shown on the P45 Part 1 should be determined in accordance with Employment Law.
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