Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.
DID YOU KNOW
P46 forms were abolished in April 2013 and have been replaced by a new starter checklist. Essentially the starter checklist and P46 are the same forms but with different names and appearances. New starter checklists are not sent to the tax office. Instead, an FPS is sent via payroll software.
What is a P46?
A P46 form was given to employees who were starting a new job and did not have a P45 from their previous employer or left their job in the previous tax year.
When an employee starts a new job, their new employer needs to know which tax code to use on their payslip. An employee’s tax code tells them the correct amount of income tax to deduct and personal allowance to give each time they get paid as well as any adjustments to make such as for student loan repayments.
In the absence of a P45 from a previous employer, the new employer used a P46 to get the employee’s personal details to help work out the most appropriate tax code for the individual. It may not always be the correct one. But the HMRC would notify them of the correct tax code to use in time (with a P9 notification).
Any under or over-payment in income tax would be dealt with in later payslips once the correct tax code had been applied.
How Do You Get a P46?
The P46 form was created by HM Revenue & Customs (HMRC) and was provided by a new employer to their employees who needed them.
It was the responsibility of new employees to complete and return the form to their new employer.
The most common reasons new employees were given a P46 by their new employer included that they:
- Were starting their first job;
- Left their job in the previous tax year;
- Had lost their P45 or were waiting for it from their previous employer;
- Already had another employed job role;
- Were self-employed and were starting an employed role.
What Information is Collected on a P46?
The form was made up of two parts – one to be completed by the employee and the second by the new employer.
The first section asked for the new employee’s personal details such as their:
- National insurance number
- Date of birth
- Postgraduate or student loan repayments
- Start Date
What Do the Statements on a P46 Mean?
The next part of the first section contained. list of 3 statements (A, B & C) to help the new employer put the new employee on the most appropriate tax code. They would use this code until the tax office notified them of the correct code to use.
The employee had to select one of the three before returning the form:
P46 Statement A
This is my first job since 6 April and I’ve not been receiving taxable Jobseeker’s Allowance, Employment and Support Allowance, taxable Incapacity Benefit, State or Occupational Pension.
This statement told the new Employer that they have had no other forms of taxable income during the current tax year.
This box should not have been ticked on the P46 form unless the new employee was certain they hadn’t received any other forms of taxable income. Otherwise, they could have ended up owing HMRC money due to not paying the correct amount of income tax.
P46 Statement B
This is now my only job but since 6 April I’ve had another job, or received taxable Jobseeker’s Allowance, Employment and Support Allowance or taxable Incapacity Benefit. I do not receive a State or Occupational Pension.
By answering yes to Statement B on the P46, the new employee would be placed on a W1 or M1 tax code. This stands for week 1 or month 1, depending on whether they are paid weekly or monthly.
P46 Statement C
As well as my new job, I have another job or receive a State or Occupational Pension.
Choosing Statement C on the P46 form meant the new employer put the individual on one of the following tax codes, depending on their gross pay:
- Basic Rate (BR) where all income is taxed at 20%
- Emergency tax (OT) where all income is taxed at 20%, 40% and 45% depending on how much they are paid
- D0 tax code where all income is taxed at 40%
The employee would receive no personal allowance in their payslip with any of these codes.
As part of the digitisation of the payroll system, P46 forms were abolished in April 2013 and are now called a new starter check list. Essentially they contain the same information but the new style form no longer needs to be sent to HMRC.
A P46 and the starter checklist are very similar forms designed to collect a new employee’s personal details to work out the right tax code to use, but the latter are not sent to HMRC. Instead, the information contained on a new employee is now sent to HMRC as part of the normal FPS (Full Payment Submission) sent via payroll software as part of normal payroll reporting.
You can download a copy of a P46 form here. However, it is now archived on the HMRC website since the form has been abolished and replaced by the new starter checklist.
If you are starting your first job, then you will most likely be asked by your new employer to fill in a P46 form. This is so your new employer can work out the correct tax code to put you on and calculate your income tax accurately. Normally your new employer will find information about your tax code and national insurance number on a P45, which is a form issued by a previous employer when you leave a job. If this is your first job no previous information will be available.
Until April 2013 a P46 could be used to replace a P45 form. As the form is no longer in use, it cannot replace a P45 anymore.
No. A P46 was not mandatory. If a new employee did not give one to their new employer they would be placed on emergency tax. This could mean the employee would fall behind on deductions like student loan repayments.
It was the employee’s responsibility to fill in the P46 form and then hand it back to their new employer. They would then process the information and send it to the HMRC.
P46 forms were abolished in April 2013 and have been replaced by the new starter checklist. Essentially the starter checklist and P46 are the same forms but with different names and appearances. New starter checklists are not sent to the tax office. Instead, an FPS is sent via payroll software.
Until the form was abolished as part of digitising the payroll system, P46 forms could be posted to HMRC. The replacement form, the starter checklist, is not sent digitally.