Does a P45 have an impact on the payroll PAYE in United Kingdom? 14 Mar 2023

Yes, a P45 form can have an impact on the payroll PAYE (Pay As You Earn) system in the United Kingdom.

When an employee leaves a job, their employer is required to give them a P45 form which contains information about the employee's earnings and the tax that has been deducted from their pay up to the point of leaving. The employee should then pass the P45 form to their new employer, who uses the information to calculate their tax and National Insurance contributions.

The P45 form also contains a tax code that is used to determine the amount of tax to be deducted from the employee's pay. If the tax code on the P45 is incorrect, it can lead to under or overpayment of tax. Order P45 Online

It is important for employers to ensure that they use the correct information from the P45 form when setting up the employee's payroll, to avoid errors in the PAYE system. Employees should also ensure that they keep their P45 form safe, and provide it to their new employer as soon as possible to avoid any delays or errors in their tax payments