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Top Paye Inland Revenue P46 Forms Tax Questions When No P45 Form
If new employee does not have a P45 tax form then they have to complete a P46 form which the employer submits to HMRC. Inland Revenue P46 forms can be downloaded from the HMRC website and also submitted online. Completing the P46 forms solves a number of tax questions a new employer may have regarding the new employee status and is essential to ensure the PAYE records start off on a correct basis
1. P46 Is Required If The New Employee Does Not Have A P45 There can be a variety of reasons why a new employee does not have a P45 from first job, student, first employment in the current financial year, immigrant worker, P45 lost or perhaps not issued by a previous employer or issued late. Whatever the reason if a new employee does not give the new employer a P45 on the day employment commences then the employer has a responsibility to complete and submit the P46 form.
Completing the Inland Revenue P46 form is the method an employer uses to advise HMRC about the employment of a new employee who does not have a P45 tax form to enable the new employer to set up the paye records.
Click here to obtain the official Inland Revenue P46 download form
2. Send P46 To Inland Revenue By First Pay Day Officially P46 Inland Revenue forms should be sent to HMRC on the first pay day. That is not the first day a new employee starts employment but the first day they are paid allowing a short period of time for a new employee who does not have a P45 to obtain one.
3. P46 Can Be Retained By Employer Until Employee earnings Reach Lower Earnings Limit A new rule was introduced for the 2008 09 financial year in that as from 6 April 2008 if the employee has ticked either box A or B then the P46 revenue form does not have to be sent to HMRC until that employee earnings reach the lower earnings limit. PAYE records still need to be produced by the employer but official notification to HMRC is not required unless the lower earnings level is exceeded.
Should the earnings of the employee continue to be below the lower earnings limit then the earnings and employment would still be advised to HMRC on the P35 annual employers return.
4. What To Do If Employee Does Not Complete P46 If the new employee does not complete the Inland Revenue P46 form before the first pay day then the new employer must complete section one on behalf of the employee. Section one being the employee name and address, date of birth and national insurance number.
5. No National Insurance Number If the employee does not have a national insurance number then the employer must also advise the job centre. The P46 revenue form can still be submitted to HMRC without a national insurance number who have the facility to trace the number from the information supplied.
While preferable for the employee to sign the P46 form the P46 tax form can be submitted by an employer without the employee signature.
6. Use BR Tax Code When No P46 If the employee does not complete a P46 form then the employer must deduct tax using a BR tax code. The BR tax code means all earnings are taxed and excludes any personal tax allowances.
7. Determining The Tax Code From The P46 Form The tax code to be applied to new employee earnings is dependent upon when the employee joined and which of the boxes A, B or C are ticked on the P46 tax form.
If box A is ticked then apply the emergency tax code which for 2008-09 financial year is 543L prior to 7 September 2008 and the new tax code 603L from 7 September onwards. Income tax is deducted on a cumulative basis. If box B is ticked then apply the emergency tax code which for 2008-09 financial year is tax code 543L prior to 7 September 2008 and the new tax code 603L from 7 September onwards. Income tax is deducted on a week 1 or month 1 basis.
If box C is ticked then apply the BR tax code. Income tax is deducted on cumulative basis.
If none of the boxes A, B or C are ticked then apply the BR tax code and deduct tax on a cumulative basis.
8. Student Loan Deductions If the new employee has ticked box D on the P46 form then student loan deductions should be made with effect from the first pay date provided the earnings level for deduction of student loans has been reached. Refer to the student loan deduction tables at Student Loan Table to determine how much should be deducted.
9. File P46 Online P46 forms can be filed online by an employer. When the Inland Revenue P46 form is filed online the employer should also have kept a record of how the information submitted was obtained. Employers with over 50 employees must file online by April 2009.
10. Register For PAYE And Online Filing Before the P46 Inland Revenue form can be filed online the employer must have obtained the facility to do so by registering with HMRC for a PAYE scheme. The HMRC website contains free software that can be used for this purpose.
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"P46 tax questions and answers for an employer to process the Inland Revenue P46 forms and issue a PAYE tax code to a new employee without a P45 form" |
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