New Starter Tax Information

HMRC’s June Employer Bulletin has provided new instruction into how we process tax details for employees. Please see the following extract:

"When completing the first Full Payment Submission for new starters it is important that you obtain and enter your employee’s correct address and post code and use the employee’s P45 information to record their previous pay, tax and student loan (if applicable).

If the employee does not have a P45 you can use the following starter checklist for PAYE.

After the starter checklist is added and submitted on your Full Payment Submission only use any tax code or previous pay or tax changes received directly from HMRC."

We can no longer amend an employee’s tax code from a P45 or new starter checklist once they have run through our payroll and the information has been passed to HMRC. We can only update a tax code when we receive an instruction directly from HMRC.

For all new starters please provide a P45 from their previous employer or a new starter checklist fully completed by the employee if they do not have a P45.

It is important for these to be sent in by the payroll processing deadline in the month that the employee first starts so we have time to process the information.

P45s must be dated within the current financial year as we cannot input out of date details from a previous year. It is important that any new starter checklist is completed in full and correctly in order for us to establish the correct tax code for the employee.

Any employee that we do not have these details for will be placed on emergency tax which is 20% of their taxable earnings each month.

Payroll cannot update tax details once an employee has been run through for the first time. It will be the responsibility of the employee to contact HMRC directly if their tax code is incorrect. Payroll would only be able to update the tax code from a HMRC instruction.

Guidance on completing a new starter checklist:

• Use up to date forms (available to download from ‘CBMDC Payroll and Pension Liaison Service Resources’ page on BSO: CBMDC Payroll and Pension Liaison Service Resources | Bradford Schools Online or directly from HMRC: https://www.gov.uk/government/publications/paye-starter-checklist)
• Read through form clearly and answer questions accurately
• Must be completed by the employee
• Questions 8, 9 & 10 must be completed to determine tax code and student loan status –take care when answering
• Declaration to be hand signed by employee
• Declaration to be dated as the day, month and year completed
• Any document not completed accurately will be rejected and an emergency tax code will be used

The phone number for HMRC is 0300 200 33 00. When an employee rings them they will be asked to quote the Tax District Reference Number which can be found on their payslip.