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This is a freeview 'At a glance' guide to which PAYE code to use for starters or leavers. 

What tax code should be used for new starters and leavers? Can I use a P45 tax code from a previous tax year? How should payments on leaving employment be taxed? 

At a glance

Starters

Starters with a P45: refer to Starters: P45 flowchart tab. 

Starters with no P45:

Leavers

Leavers in more detail

Employers should use the 0T code for all leavers, excepting:

When a P45 has not yet been issued

When no P45 has been issued:

If Form P45 has been issued:

Share-based payments

Leavers with an NT code

Starters: P45 flowchart

Use this flowchart to determine the tax code to use for a new employee where they provide form P45. 

Is the employee's P45 leaving date in the current tax year? 

Yes

Use the tax code on the P45. Use starter declaration code B, unless their P45 includes the tax code BR, 0T, D0 or D1, in which case use the starter declaration code C. 

No ↓

 

 

Is the employee's P45 leaving date in the immediately previous tax year? 

No

The employee should complete a new starter checklist to determine the tax code to be used.

Yes ↓

 

 

Does the employee's P45 tax code include BR, 0T, D0 or D1?

Yes

Use the tax code on the P45, and starter declaration code C

No ↓

 

 

Did the employee start employment with you between 6 April and 24 May?

No

Use the emergency tax code on a W1/M1 basis and starter declaration code B.

Yes ↓

 

 

Does the employee's P45 tax code end in L, M or N? 

No

Use the tax code on the P45, and starter declaration code B.

Yes ↓

 

 

P45 tax code ending in L

Add 7 to the tax code on the P45 (e.g. 1250L becomes 1257L). Use starter declaration code B.

P45 tax code ending in M

Add 8 to the tax code on the P45 (e.g. 1375M becomes 1383M). Use starter declaration code B.

P45 tax code ending in N

Add 6 to the tax code on the P45 (e.g. 1125N becomes 1131N). Use starter declaration code B.

 

 

 

Note: W1/M1 = week 1/month 1 basis.

 
 


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