Sort out tax matters when an employee leaves

What forms you need to fill in

You will need to fill in forms, both at the time your employee leaves and at the end of the tax year, even though they may no longer be working for you then.

Form P45

When an employee leaves you need to fill in a form P45 with details of their pay and tax details for the current year - download a sample form P45 from the HM Revenue & Customs website (PDF).

The version you should use comes in four parts (parts 1, 1a, 2 and 3). You should give the last three parts of the completed P45 to your employee when they leave, and send part 1 immediately to your local HM Revenue & Customs office.

If an employee dies, you need to fill in their P45 and send all four parts to your local HM Revenue & Customs office. Give the name of their personal representative - if you know it - and say how much more pay is due, and when.

Replacing or altering a P45

If a former employee ever loses their P45, or you later realise that you made a mistake when filling it in, ask them to contact HM Revenue & Customs immediately. You should never amend someone's P45 or complete another for them.

Sick pay

Statutory Sick Pay (SSP) should be taxed in the same way as normal earnings. If you paid your employee SSP for at least one week in the last eight before they left your employment, then you may need to issue to them form SSP1(L), a leaver's statement. However, this is only if they ask for this form. Download form SSP1(L) from the HM Revenue & Customs website (PDF).

Ongoing records

Add your employee's leaving date to the P11 where you have been recording their pay and deductions throughout the tax year. View a specimen of form P11 on the HM Revenue & Customs website (PDF). Also record any Statutory Maternity, Paternity or Adoption payments you make after they leave.

Subjects covered in this guide

• Introduction
• What forms you need to fill in
• Standard payments
• Statutory Maternity, Paternity and Adoption Pay
• Taking account of student loan repayments
• Redundancy payments
• Employment tribunal awards
• Lump sum and non-cash payments

 

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