When a new employee starts without a P45 they should be asked to complete a Starter Checklist.
This does not have to be the one that can be completed online, indeed employers are free to design their own forms as long as this captures the necessary information:
- Has the employee been sent to work temporarily in the UK by an overseas employer?
- Have they received a P45 from your previous employer (in which case, use this rather than the Stater Checklist)
- Personal information such as full name, address, gender, National Insurance Number etc
- Is this the only job since leaving full-time education?
- Is this the only job (but they have had another this tax year)?
- Does the employee get payments from a pension (including State, personal, workplace etc)?
The above information allow the allocation of the correct tax code. However, it does not allow the employer to operate a Student Loan if this is applicable. Therefore, the new employee should be asked whether there is one to repay (Plan 1, 2, 3 or 4).
The online Starter Checklist asks all the right questions and allows this to be printed to give to the new employer.
All the questions must be completed in one session. There is no option to complete some of the questions and complete the others later. HMRC’s guidance was never clear on this point, however, on 23 August 2024 they updated this to clarify that the online form does not allow you to save progress and return to it.
For Bookkeepers
The most important thing to take from this HMRC update to guidance is that the Starter Checklist questions must be completed by the new employee – every new employee. If we have the P45, this will give us tax code and earnings information from the previous employment. However, it will not indicate the correct Student Loan Plan type.
It is important that we get the correct the code and Student Loan Plan type correct, ideally at the time the employee is paid for the first time. Clients need to be aware of this obligation.
