Everything you need to know about your P45

Fewer people may be switching jobs as the number of job vacancies in the UK has slumped, but there is an important document they will all need if they do find a new position: the P45.

There were 781,000 jobs on offer in the first three months of the year, according to the Office for National Statistics (ONS), down 3.2% on the previous quarter.

If you do leave your job and move to a new role, "it makes life a lot easier" if you know how to go about securing your P45, said Unbiased.

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What is a P45?

A P45 is a crucial document that employees should receive when they leave a job.

While a P60 summarises an employee's tax information at the end of each tax year, said Starling Bank, a P45 is used "when employees change jobs".

The document is essential for passing on tax and payroll information from the old employer to the new one.

What does a P45 look like?

The P45 does not have a "standard format", said Unbiased, and each may be "slightly different", but it is always divided into four parts.

Part one is sent to HMRC, and part 1A is kept by the worker for their records, while parts two and three are given to the new employer.

What information is on a P45?

A P45 contains numerous details. This includes details of your former employer, National Insurance number, tax code, gross pay and the amount of tax paid for the year.

You need your P45, added the financial advice firm, to make sure you are assigned "the right tax code in your new job" or you could end up paying too much tax.

The document won't show National Insurance deductions or pension contributions, "so it may be useful for the employee to keep their last payslip, in case they need to trace these when they reach retirement", said Starling Bank.

When do you get a P45?

You should get your P45 on your last working day or shortly afterwards. If you haven't received the document within a few weeks of leaving, you "may need to follow up with your employer", said The ANNA Money blog.

But "don't delay". A failure to chase a P45 could mean you end up overpaying income tax.

It is also important to keep hold of your P45 so you "have your own record of your tax code and tax paid to date for the year".

What happens if you lose your P45?

HMRC doesn't provide replacement P45s, said TaxScouts, but if you do misplace yours, "don't panic".

When starting a new job, your new company will give you a starter checklist form that will "calculate what tax code you should be on".

The checklist can be filled in online, but workers will need important information to hand such as their address and postcode, National Insurance number and any relevant student loan plans.