How to add a new employee with no P45 to payroll

This article explains what to do if you hire an employee who doesn't have a P45.

Please note that FreeAgent's payroll functionality won't be available if you have an unincorporated landlord or non-UK account type, or if you're preparing your accounts using cash basis accounting.

First, follow the guidance outlined on HMRC's website and use their starter checklist to find the correct options when creating a payroll profile for the new employee.

The starter checklist should provide you with the relevant starting declaration, tax code and whether deductions should temporarily be made on a Week 1/Month 1 basis.

When creating a payroll profile for the employee, if you are unable to ‘save’ the profile because there are no figures in the ‘Total pay in previous employment’ field, please check the tax code to make sure you've entered it correctly and ticked the relevant box.

Later, when you receive the employee's P45, you'll need to edit the payroll profile for that employee to make the appropriate updates.

Make sure that you enter the employee's updated tax code as well as the total pay and tax in previous employment for this tax year. When you run and report the following month's payroll, the amended year-to-date figures will be submitted to HMRC automatically.

Did you find this article useful?