What Is a P45? P45 and Umbrella Companies Explained
If you've ever left a job or switched umbrella companies, you've dealt with a P45. This guide explains what it is and what's on it. It covers what to do when you move between providers.
What is a P45?
A P45 is a document your employer gives you when you leave. It shows your tax code, your total pay for the tax year so far, and the total tax deducted. Your new employer needs it to set up your payroll correctly. Without it, you fill in a new starter declaration instead.
HMRC requires employers to issue a P45 every time employment ends. It's not optional. The employer submits the leaving details to HMRC and gives you a copy.
The P45 has four parts. Part 1 goes to HMRC. Parts 1A, 2, and 3 go to you. You give Parts 2 and 3 to your new employer. You keep Part 1A for your own records.
What information is on a P45?
A P45 shows your name, address, National Insurance number, tax code, and leaving date. It also shows your total gross pay and total tax paid in the current tax year. Your new employer uses it to continue deducting the right amount of tax.
The key figures are pay to date and tax to date. These let your new employer check whether you've paid the right tax so far.
If you've paid the right amount, they carry on with your existing tax code. If something looks off, they adjust it. This stops you paying too much or too little without realising.
What is a new starter declaration?
A new starter declaration is the form you fill in when you start a new job without a P45. Your new employer uses it to work out your tax code. It replaces the old P46 form. You choose Statement A, B, or C depending on your employment history in the current tax year.
Statement A means this is your first job in the tax year. Statement B means you had another job but it's ended. Statement C means you have another job or pension alongside this one.
If you pick the wrong statement, you might end up on the wrong tax code. That can mean paying too much tax. You'd claim it back through Self Assessment or an HMRC adjustment.
Always tell your umbrella which statement applies to you. They set up your payroll based on what you declare.
What happens to your P45 when you switch umbrella companies?
When you leave one umbrella company, they issue you a P45. You give that P45 to your new umbrella company when you join. The new umbrella uses it to pick up your payroll where the last one left off. If you don't have a P45, you fill in a new starter declaration instead.
Your old umbrella must issue the P45 promptly after your leaving date. HMRC requires this. In practice, it can take a few days after the final payroll run.
If there's a delay, your new umbrella uses a starter declaration temporarily. Once your P45 arrives, hand it over. They'll update your payroll and adjust any tax paid under the wrong code.
Read our switching umbrella companies guide for the full process of moving between providers.
Can you get a P45 even if you only worked one day?
Yes. Even if you worked for an umbrella company for a single day and received one payment, they must issue a P45 when you leave. There's no minimum length of employment. The P45 covers whatever pay and tax applied during that time, even if the figures are very small.
This catches some contractors off guard. Umbrella contracts are employment contracts. Every time employment ends, a P45 follows.
Tested an umbrella with one assignment and moved on? You'll still get a P45. Keep it. Your next umbrella or HMRC may need it.
What if you lose your P45?
Your old employer can't issue a second P45 once they've submitted the original to HMRC. If you lose it, fill in a new starter declaration with your new employer. They'll use that to set your tax code. You can also check your tax history through your Personal Tax Account on GOV.UK.
HMRC's records hold your pay and tax data from all PAYE employment. Your Personal Tax Account on GOV.UK shows your cumulative figures. In most cases, the right tax code can be set without the physical P45.
If you're worried your tax code is wrong, contact HMRC directly. They can review your record and issue a new code notice to your employer.
How does the P45 process work at DASA?
When you leave DASA, we issue your P45 after your final payroll run. We submit the leaving information to HMRC and post your copy. When you join DASA from another umbrella, hand over your previous P45 and we'll set up your payroll correctly from day one.
DASA holds dual accreditation from both FCSA and Professional Passport. That means two independent compliance bodies have audited how we operate. Your tax is always handled correctly, from first payslip to final P45.
Want to understand your pay in more detail? Read our umbrella contractor pay and tax guide. Or check our how to read an umbrella company payslip guide. Use the umbrella take home pay calculator to see your net pay. Visit the DASA homepage to get started.
FAQ
What is a P45?
A P45 is a document your employer issues when your employment ends. It shows your tax code, total pay, and total tax paid so far in the tax year. Your new employer needs it to set up your payroll correctly.
Do umbrella companies issue P45s?
Yes. Umbrella companies are employers, so they must issue a P45 every time you leave. This applies even if you only worked for one day. Your P45 covers the pay and tax for your time with that umbrella.
What do I do with my P45 when switching umbrella companies?
Give Parts 2 and 3 to your new umbrella company. They use it to continue deducting the right tax from your pay. If your new umbrella needs to start paying you before your P45 arrives, they'll put you on a starter declaration temporarily.
What if I don't have a P45?
Fill in a new starter declaration with your new employer. You choose the statement that matches your employment history in the current tax year. Your new employer uses this to set your initial tax code.
Can I get a replacement P45?
No. Employers can only issue a P45 once. If you lose it, use a new starter declaration instead. You can also check your tax history in your Personal Tax Account on GOV.UK.
What is a new starter declaration?
A new starter declaration is a form you fill in when starting a new job without a P45. You choose Statement A, B, or C based on your situation. It tells your new employer how to set your tax code.
