Check out our full comparison of Apple Pay vs PayPal in the UK, including pros, cons and features compared.
If you’ve ever left a job, you will have received a P45. This is an official form issued by your employer, containing all the details of your salary and how much tax you’ve paid so far in the tax year.
In this guide, we’ll give you the lowdown on everything you need to know about the P45 form. We’ll cover the information it includes, how to understand the different parts of the form and the circumstances in which you can expect to receive a P45. And crucially, why the P45 is important.
We’ll also take a quick look at one of the most cost-effective ways to get paid in multiple currencies - the Wise multi-currency account. If you’re thinking about your P45 because you’re changing jobs or perhaps stepping out as a freelancer, this could come in really handy.
But more on this later. Let’s concentrate on the P45 for now.
A P45 form will outline all the details of your pay and tax, up until the date you left your job. Here’s what you can expect to see:
- Your employer details, including PAYE reference
- Your details, including your National Insurance number
- Your tax code
- The date you left your job
- Your total pay in that job to date
- The total tax you paid in that job to date.
The P45 form isn’t just one page - it’s actually made up of four different parts.
Part 1 is sent to HMRC, while Part 1A is your copy as the employee. You should keep this somewhere safe for your records. We’ll look at why you might need your P45 in just a moment.
Part 2 and 3 are to be given to your new employer, when you start a new job.
A P45 is issued whenever you leave a job, no matter what the circumstances are. This means you’ll get one if you resign or are made redundant, or if your employment is terminated. You should also get a P45 when you retire.
Unfortunately, you can’t get a replacement if you lose your P45. Instead, you’ll need to fill out a Starter Checklist when starting a new job. This should cover all the basics that HMRC will need to calculate your tax code. However, if there isn’t enough information available, there’s a chance you’ll be put on an emergency tax code.
It’s easy to mix up the P45 form with other similar-looking forms, the P46 and P60. They contain some of the same information, but they have different purposes. We’ve already covered the P45, so here’s a quick guide to the other two:
A P46 is for people who’ve never worked before, or who don’t have a P45. It’s no longer in use, as it’s been replaced by the Starter Checklist form. This helps to gather the essential information about new workers, so they don’t end up on an emergency tax code.
A P60 is an annual summary of the tax you’ve paid on your salary within the tax year. It contains much of the same information as the P45, but for a whole tax year (rather than up to the point where you left your job). The P60 is issued every April, after the end of the tax year, by your employer.
If you're thinking about your P45, you may be changing jobs. If you're changing jobs, maybe it's a good time to change how you get paid.
Open a Wise multi-currency account and you can receive money in multiple currencies from all over the world - for zero fees. This is one of the most cost-effective ways to get paid, particularly if you’re a freelancer, consultant or run a business.
So, that’s it - everything you need to know about the P45 form. Hopefully, you should now have a better idea of what information is on a P45, what to do with the different parts of the form and why the P45 is useful.
Just make sure to keep yours in a safe place, as you can’t get a replacement if you lose it!
Sources used for this article:
All information from: Which.co.uk - what is a P45
Sources checked on 8 March 2021
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
Check out our essential guide to PayPal vs. credit cards for shopping online in the UK, including pros, cons, security, fees, limits and more.
Each Christmas, scammers target people with holiday booking scams. Read Alex's story to learn how scammers stole their money and tried to ruin their holidays.
If you’re looking for a good place to keep your money, or for a day to day current account, you may be wondering: is the Co-operative Bank safe - or even: is...
Each Christmas, scammers target people with holiday booking scams. Read Max's story to learn how scammers stole their money and tried to ruin their holiday.
Can I use Revolut in Albania? A handy guide covering using your Revolut card and account in Albania, spending in ALL and more.