Do You Get a P45 if Self Employed? PAYE Guide for Sole Traders

When you’re self employed, you are responsible for submitting your own accounts. This includes filling in tax returns and declaring your earnings. When you are an employee working for someone else, the employer is responsible for issuing you with such information, including PAYE forms like P45s.

This guide takes a closer look at the self employed and how P45s work. Perhaps you need answers as you are about to leave self employment and need a P45 for your new job.

Or maybe you are about to embark on a self employed venture and wondering if you need your P45 for your self assessment.

We’ll look at the implications of having or not having a P45 when self employed.

What is a P45?

You receive your P45 when the time comes to leave your current employment. This PAYE form should be given to a new employer so that they can make sure you are correctly taxed.

The P45 should not be confused with the P60 form which is issued at the end of each tax year to all employees.

A P45 contains personal information on the employee including name, address, and National Insurance Number. It will also report their salary and how much tax has been paid up until they left their job. All of this informaiton is used to get the employee onto the correct tax code in their new role.

How Do You Get a P45?

Receiving your P45 should be an automatic process, and be issued by your employer when you leave.

In theory, you should not have to do anything to start this process. However, sometimes employers forget or take their time in issuing the form. If this is the case then you should chase it up and offer a friendly reminder that you are waiting for it. They are legally obligated to give you the P45.    

However, if you are leaving a job to become self employed – a P45 is not a necessity straight away so don’t worry if your former employer won’t issue your P45 to you in a timely manner.

Related: How do I get my P45?

P45 for Self Employed Workers

When you transition from being employed to becoming self employed, you should be issued with your P45.

Your previous employer should ideally let you have this along with your final paycheck. However, some companies send it to your address after you have left. It should be sent to you within a reasonable time.

Once you receive your P45, you should pop it somewhere safe to access when you need it. When it comes to filling in your self assessment at the end of the tax year, you will need information from the P45.

This form has all your income information and the tax you have paid, which will make filling out your self assessment much easier. However, if you’ve lost your P45 or did not get one, you’ll still be able to get the information you need from HMRC either via telephone, or by logging into your Government Gateway account.

Going from Self Employed to Employed

Going from self employed back into the world of employment can be a daunting process. However, you don’t need to worry about plucking a P45 from the air, ready to hand over.

As a self employed person, you are responsible for your finances. You do an annual tax return which contains all the information HMRC needs. You’d only have a P45 available for your new employer if you left a job within the current tax year.

Your employer will instead have you fill in something called a New Starter checklist, previously called a P46. This will help you get placed on the correct tax code so that you pay the right amount of tax.

Being put on an emergency tax code can mean you pay too much or too little tax.

How to Fill Out a New Starter Checklist

A new starter checklist helps ensure employees without a tax code get placed on the correct one.

You might be without a P45 if you were previously self employed. In this instance, a new starter checklist can be issued by your employer. The information you put on it must be correct. This is because you will still need to fill in a final self assessment for the tax year. The two pieces of information need to match in terms of income and tax paid.

Filing in a new starter checklist is a simple process. It contains all the usual boxes to fill in such as name, address and date of birth. It also contains information relating to student loans. Answers to these questions ensure you are placed on the correct tax code.

The new starter checklist can be completed in paper format or on the HMRC website. This is then given to the employer who can send the necessary section off to HMRC. This process ensures you are adding to the PAYE system and hopefully bypasses the need for an emergency tax code.

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