What Is a P45? Definition and When You Get One

Most people receive a P45 and file it away without reading it. That is a mistake. A single wrong figure on that slip of paper can trigger an emergency tax code that quietly overtaxes your first few payslips at your new job by hundreds of pounds.

What Does a P45 Actually Show?

The form has four parts. Part 1 goes to HMRC automatically. You receive Parts 1A, 2 and 3. Part 1A is your personal copy to keep. Parts 2 and 3 go to your new employer as a pair.

The key information on a P45 is:

The cumulative pay and tax figures are the engine of the whole document. Under PAYE, your tax-free Personal Allowance of £12,570 (2025/26) is spread across the year in equal monthly or weekly portions. Your new employer picks up exactly where the last one left off, so you are neither overtaxed nor undertaxed.

A Worked Example: Why the Figures on Your P45 Matter

Say you leave a job on 31 August 2025, having earned £18,000 since 6 April. Your employer has deducted £1,086 in income tax (the standard 20% band calculation after five months of Personal Allowance relief). You start a new job paying £3,000 per month from 1 September.

If you hand over your P45, your new employer sees you have already used £18,000 of your £12,570 allowance and have taxable income of £5,430 to date. They continue the cumulative calculation correctly.

If you do not hand it over, they have no cumulative figures and may default you to a Week 1/Month 1 basis using an emergency tax code, recalculating each month from scratch as though you earned nothing before. On £3,000 a month under Month 1 treatment, you get one-twelfth of the Personal Allowance (£1,047.50) against your earnings rather than the remaining allowance. The difference can mean an extra £30 to £50 overtaxed per month until HMRC corrects the code.

Who Issues a P45, and When?

Every employer operating PAYE is legally obliged to produce a P45 when an employee leaves. This includes full-time, part-time and short-contract workers. The form should be provided on your last day or promptly after, in line with HMRC's Real Time Information (RTI) reporting requirements.

Situations where you receive a P45:

• You resign, are made redundant or are dismissed
• A fixed-term contract ends
• You retire
• You stop working for an agency that paid you through PAYE

Situations where you do not receive a P45:

• You are self-employed or working through your own limited company
• You are paid cash in hand outside PAYE (which carries its own risks)
• You are still employed but take on an additional job (you use a starter checklist for the second role)

What If You Are Self-Employed?

Freelancers and sole traders operating outside PAYE will never receive or issue a P45. If you have recently moved from employment to self-employment, your final employer should still issue one for your last PAYE role. Keep it; you may need the figures when completing your Self Assessment return to confirm income already taxed at source during that tax year.

What to Do If Your Employer Refuses to Give You One

An employer who withholds a P45 is breaking the law. If they are late or unresponsive, contact HMRC directly on 0300 200 3300. HMRC can prompt the employer and, if necessary, provide the information directly. You can also check your tax code to see whether you have already been moved onto an emergency code, which is a sign your new employer has not received the P45 data.

Common reasons P45s go missing or are delayed:

• The employer uses a manual or outdated payroll system
• The employer has gone into administration (HMRC can still supply the figures)
• You left on bad terms and the form was sent to an old address

In every case, do not wait and hope. An emergency code compounds quietly. One phone call to HMRC usually resolves it within a few weeks.

P45 vs Starter Checklist: What Happens Without One

If you genuinely cannot produce a P45 (you have lost it, it was never issued, or this is your first job), your new employer asks you to complete a starter checklist. You choose one of three statements:

• Statement A: This is your first job since 6 April and you have not been receiving taxable benefits or a state pension.
• Statement B: This is your only job, but you have had another job or received taxable benefits since 6 April.
• Statement C: You have another job or receive a pension alongside this one.

Choosing the wrong statement is one of the most common sources of tax-code errors in the UK. Statement A gives you the full Personal Allowance against this job on a cumulative basis. Statement C gives you no Personal Allowance against this job at all. Getting it wrong can mean months of overtaxation that must be reclaimed from HMRC, typically at the end of the tax year.