New Employer - P45 ignored

sleepymans

My OH resigned from previous job on 5th September and was given a P45 which he handed to new employer on 14th October when he started his new job.
He has just received his first payslip and he has been taxed with the emergency code instead of the code shown on his p45. We had expected the unused tax allowance from 6th Sept to 13th Oct to result in no income tax deduction on this first pay, but obviously this hasn't been the case.


He will query it on Monday when the office reopens, however, could it be the case that the new employer requires authorisation from HMRC to apply any code other than emergency code? Or should they take the p45 figures as its evidence?


Your advice, in the meantime would be much appreciated.

le_loup

The P45 is sufficient. The new employer has the responsibility to use the code on the P45.

Caz3121

when is his new employers payroll cutoff date? it is possible that the P45 was processed too late for this months run but would be sorted out for next month

chrisbur

As has been said possibly to late for payroll run or possibly mislaid, either way check with payroll dept. Might be worth checking the P45 details ie what appears in sections 6, 7 and 8. If you could give these from part 1A they can be checked.

Regarding the emergency tax can you advise exactly what tax code is being used, emergency tax code is 1000L which in this case would be applied on a month 1 basis.
To get an idea of what affect the gap between jobs would have on tax would need the P45 details as for example if the P45 was not issued until 6 Sept this would make a considerable difference.

sleepymans

Hi
Thanks to you all for your input.

He was weekly paid in the old job and is again now in the new job, if that makes any difference?

The P45 is dated 10.09.14 with a date of leaving 05.09.14 and shows:

Tax code at leaving date 1006L Week number 23

Total pay to date 9401.75
Total tax to date 989.40

His first new pay advice shows:
week ending 19/10/14 total pay 375.75 Tax deducted £75 NI 26.73
Tax period 29
YTD 375.75
Tax Code OT Week/month1
Tax YTD 75.00
NI YTD 26.73

How much tx should have been deducted if they had not ignored the P45 please?

(They have also paid him at the wrong rate, but thats another issue!)

Many Thanks for your thoughts
Sleepy

chrisbur

If tax code of 1006L with these figures had been applied to this wage you would have received a tax rebate of £157. The tax code may not be correct though as it appears a touch higher then the normal code of 1000L if you have anything like uniform washing allowance which no longer applies your tax code will go down a little when you advise HMRC. We are talking about an allowance here that gives you £12 ayear so this will not affect your tax a great deal.

Regarding the 0T tax code this is the tax code an employer uses if they do not have a P45 and the new employee declines to make a new starter declaration when they request one. I would suggest speak to wages office, possibly P45 due to be applied next week then all sorted but if lost ask to make a new starter declaration to get onto emergency tax which had you been on this would have reduced the tax paid on last wage by almost £40.

Regarding P45s in general a new employers should use the tax code and the gross figure if showing on parts 2 and 3 without referring to HMRC though when I was involved in payroll if something was obviously wrong then it would be refereed to HMRC who might ask us to use the emergency tax code until it was sorted.

I have assumed no taxable income between jobs if there was this could change the tax position.

sleepymans

Many Thanks Chrisbur.
No, there was no pay at all between the two employers.
The extra 6 above the standard personal allowance on the tax code is in respect of uniform washing, but as you say it is negligible so not worth pursuing.

Many Thanks for your time in responding.
Regards

jamesd

One other thing worth knowing is that whenever they do get it right the usual cumulative tax calculation will pay him whatever may have been overcharged. So it's a temporary lack of money rather than a permanent one. Chances are it'll all be sorted out with the next weekly payroll that'll pay him a bit more than usual as a correction. Then the one after that will have his ongoing state that you can use to plan your budget with.