The Income Tax (Pay As You Earn) Regulations 2003

Cessation of employment U.K.

Cessation of employment: Form P45 U.K.

36.—(1) On ceasing to employ an employee in respect of whom a code has been issued, the employer must complete Form P45.

[F1 (1A) If Part 3 of Form P45 is not available—

(a) the employer is not required to complete that Part of the Form, and

(b) where the employer does not complete that Part, any requirement, however expressed, in these Regulations which relates only to Part 3 does not apply.]

(2) The employer must then—

(a) send Part 1 of that form to the Inland Revenue [F2 if the employer is one to whom paragraph (2A) applies], and

(b) provide Parts 1A, 2 and 3 to the employee,

on the day on which the employment ceases or, if that is not practicable, without unreasonable delay.

[F3 (2A) This paragraph applies to—

(a) non-Real Time Information employers, and

(b) Real Time Information employers to whom HMRC has given a notice requiring the employer to send to HMRC Form P45 or Form P46 on the commencement of a new employee’s employment.]

(3) Retirement on pension is not a cessation of employment for the purposes of this regulation if the PAYE pension income is paid by the same employer after retirement.

(4) The information listed in column 1 of Table 2 must, subject to the conditions set out in column 2, be provided in the various Parts of Form P45 as indicated in columns 3 to 5.

Table 2

Information which must be provided in Form P45

1.	2.	3–5.
Information to be provided	Conditions	Form P45 Part
		1	1A	2, 3
1.  the employer’s PAYE reference U.K.		yes	yes	yes
2.  the employee’s national insurance number U.K.	if known	yes	yes	yes
3.  the employee’s name U.K.		yes	yes	yes
[F4 3A. the employee’s date of birth		yes	no	no
3B. the employee’s sex		yes	no	no]
4.  the date on which the employment ceased U.K.		yes	yes	yes
5.  the employee’s code or, if more than one, the latest code, issued by the Inland Revenue for the tax year during which the employment ceased U.K.		yes	yes	yes
6.  whether the employee’s code is used on the cumulative basis U.K.		yes	yes	yes
7.  the tax week or month in which the last relevant payment was made to the employee or, in a case falling within regulation 24, was treated as having been made U.K.	if the employee’s code is used on the cumulative basis	yes	yes	yes
8.  the total payments to date and the corresponding total net tax deducted U.K.	if the employee’s code is used on the cumulative basis	yes	yes	yes
9.  the total payments to date relating to the employment in question and the corresponding total net tax deducted U.K.	if the employee’s code is used on the cumulative basis, and if different from the information supplied under item 8	yes	yes	no
10.  the total payments to date relating to the employment in question and the corresponding total net tax deducted U.K.	if the employee’s code is not used on the cumulative basis	yes	yes	no
11.  the number used by the employer to identify the employee U.K.	if any	yes	no	no
12.  the department or branch in which the employee was employed U.K.	if any	yes	no	no
13.  the employee’s address U.K.	if known	yes	no	no
14.  the employer’s name U.K.		yes	yes	no
15.  the employer’s address U.K.		yes	yes	no
16.  the date the Form is completed U.K.		yes	yes	no

(5) This regulation is subject to regulations 38, 39 and 180 (death of employee etc).

Textual Amendments

F1 Reg. 36(1A) inserted (6.4.2013 with application in relation to the tax year 2013-14 and subsequent tax years) by The Income Tax (Pay As You Earn) (Amendment) Regulations 2013 (S.I. 2013/521), regs. 1(2), 16

F2 Words in reg. 36(2)(a) inserted (6.4.2012) by The Income Tax (Pay As You Earn) (Amendment) Regulations 2012 (S.I. 2012/822), regs. 1(1), 6(a)

F3 Reg. 36(2A) inserted (6.4.2012) by The Income Tax (Pay As You Earn) (Amendment) Regulations 2012 (S.I. 2012/822), regs. 1(1), 6(b)

F4 Words in reg. 36(4) Table 2 inserted (6.4.2009) by The Income Tax (Pay As You Earn) (Amendment No. 4) Regulations 2007 (S.I. 2007/2969), regs. 1(3), 3

Commencement Information

I1 Reg. 36 in force at 6.4.2004, see reg. 1

[F5 Income subject to retrospective tax provision — information to employee U.K.

36A.— (1) This regulation applies if—

(a) a payment is made to an employee;

(b) the employment in connection with which it was paid ceases;

(c) the payment becomes a qualifying payment after the cessation of the employment;

(d) the tax year in which the payment was actually made is not closed, and

(e) the amount of the qualifying payment was not included in Form P45.

(2) If this regulation applies the person who made the payment must provide to the employee, without unreasonable delay after the relevant time, details of—

(a) the date on which the qualifying payment was actually made;

(b) the amount of the qualifying payment; and

(c) the amount of tax deducted under regulation 62(4) or (5).]

Textual Amendments

F5 Reg. 36A inserted (6.4.2007) by The Income Tax (Pay as You Earn) (Amendment) Regulations 2007 (S.I. 2007/1077), regs. 1, 4

PAYE income paid after employment ceased U.K.

37.—(1) This regulation applies if a relevant payment is made to an employee after the employment has ceased—

(a) by the former employer in respect of the former employment, or

(b) by any other person in respect of an obligation of the former employer,

and the payment has not been included in Form P45.

[F6 (1A) But this regulation does not apply if regulation 37A applies.]

[F7 (2) [F8 The] person making the payment must deduct tax on the non-cumulative basis using the 0T Code.

F9 (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F10 (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(3) But—

(a) the payment does not affect the cessation of employment, and

(b) the provisions listed in paragraph (4) do not apply.

(4) The provisions are—

regulation 21	deduction and repayment of tax by reference to employee’s code
regulations 22 and 23	cumulative basis
F11 . . .	F12 . . .
Chapters 2 and 3 of this Part	new employees and new pensioners: Forms P45 and P46.

(5) The person making the payment must record the following information in a deductions working sheet (which the person must prepare for the purpose if one has not already been prepared for that tax year).

(6) The information is—

(a) the date of the payment,

(b) the amount of the relevant payment, and

(c) the amount of tax deducted on making the payment, or to be deducted or accounted for under regulation 62(4) or (5) (notional payments).

(7) The person making the payment must also notify the employee of the information mentioned in paragraph (6) without unreasonable delay.

Textual Amendments

F6 Reg. 37(1A) inserted (6.4.2007) by The Income Tax (Pay as You Earn) (Amendment) Regulations 2007 (S.I. 2007/1077), regs. 1, 5

F7 Reg. 37(2)-(2B) substituted for reg. 37(2) (6.4.2011) by The Income Tax (Pay As You Earn) (Amendment) (No.2) Regulations 2011 (S.I. 2011/1054), regs. 2, 3

F8 Word in reg. 37(2) substituted (6.4.2012) by The Income Tax (Pay As You Earn) (Amendment) Regulations 2012 (S.I. 2012/822), regs. 1(1), 65(a)

F9 Reg. 37(2A) omitted (6.4.2012) by virtue of The Income Tax (Pay As You Earn) (Amendment) Regulations 2012 (S.I. 2012/822), regs. 1(1), 65(b)

F10 Reg. 37(2B) omitted (6.4.2012) by virtue of The Income Tax (Pay As You Earn) (Amendment) Regulations 2012 (S.I. 2012/822), regs. 1(1), 65(c)

F11 Words in reg. 37(4) omitted (6.4.2011) by virtue of The Income Tax (Pay As You Earn) (Amendment) Regulations 2011 (S.I. 2011/729), regs. 1, 8(b)(i)

F12 Words in reg. 37(4) omitted (6.4.2011) by virtue of The Income Tax (Pay As You Earn) (Amendment) Regulations 2011 (S.I. 2011/729), regs. 1, 8(b)(ii)

Commencement Information

I2 Reg. 37 in force at 6.4.2004, see reg. 1

[F13 Income paid after cessation of employment subsequently becoming subject to PAYE U.K.

37A.— (1) This regulation applies if—

(a) a payment has been made, after the cessation of the employment, to a former employee—

(i) by the former employer, or

(ii) by any other person in respect of an obligation of the former employer;

(b) that payment becomes a qualifying payment after the employment ceased; and

(c) the amount of the qualifying payment has not been included in Form P45.

(2) Where a qualifying payment has been made in a closed year, the employer must deduct tax, from any other payment made to the former employee in the tax period at the relevant time—

(a) in accordance with the last code used for the tax year in which the qualifying payment was made, or

(b) if the employer has not been notified of a code for that tax year, at the [F14 additional] rate of tax applicable for that year.

(3) Where a qualifying payment has been made in an open year, the employer must deduct tax from any other payment made to the former employee—

(a) in accordance with the code in force in the final tax period in which the employee was employed, or

(b) if the employer has not been notified of a code, at the [F15 additional] rate of tax applicable for that year.

(4) Neither the making of the qualifying payment, nor its subsequently becoming taxable, affect the cessation of the employment, and the provisions listed in regulation 37(4) do not apply in relation that payment.

(5) The employer must record the following information in a deductions working sheet for the tax year in which that payment was made.

If a deductions working sheet has not already been prepared for that tax year, the employer must prepare one.

(6) The information is—

(a) the date on which the qualifying payment was actually made;

(b) the amount of that payment; and

(c) the amount of tax to be deducted or accounted for under regulation 62(4) or(5) (notional payments).

(7) The employer must also notify the employee of the information listed in paragraph (6) without unreasonable delay after the relevant time.]

Textual Amendments

F13 Reg. 37A inserted (6.4.2007) by The Income Tax (Pay as You Earn) (Amendment) Regulations 2007 (S.I. 2007/1077), regs. 1, 6

F14 Word in reg. 37A(2)(b) substituted (6.4.2011) by The Income Tax (Pay As You Earn) (Amendment) Regulations 2011 (S.I. 2011/729), regs. 1, 9(a)

F15 Word in reg. 37A(3)(b) substituted (6.4.2011) by The Income Tax (Pay As You Earn) (Amendment) Regulations 2011 (S.I. 2011/729), regs. 1, 9(b)

Death of employee U.K.

38.— [F16 (A1) This regulation applies to—

(a) non-Real Time Information employers, and

(b) Real Time Information employers to whom HMRC has given a notice requiring the employer to send to HMRC Form P45 or Form P46 on the commencement of a new employee’s employment.]

(1) On the death of an employee (other than a pensioner) in respect of whom a code has been issued by the Inland Revenue, the employer must—

(a) complete Form P45 indicating in Part 1 that the employee has died, and

(b) send it to the Inland Revenue.

(2) The employer must comply with paragraph (1)—

(a) on the day on which the employer learns of the employee’s death, or

(b) if that is not practicable, without unreasonable delay.

(3) The employer must, on making a relevant payment after learning of the employee’s death but before completing Form P45, deduct or repay tax as if the deceased employee were still alive and employed by the employer at the date of the payment.

(4) Regulation 37(2) to (6) applies to any relevant payment which—

(a) is made in respect of the employee’s employment after the date of the employee’s death, and

(b) is not included in Form P45.

Textual Amendments

F16 Reg. 38(A1) inserted (6.4.2012) by The Income Tax (Pay As You Earn) (Amendment) Regulations 2012 (S.I. 2012/822), regs. 1(1), 7

Commencement Information

I3 Reg. 38 in force at 6.4.2004, see reg. 1

Death of pensioner U.K.

39.— [F17 (A1) This regulation applies to—

(a) non-Real Time Information pension payers, and

(b) Real Time Information pension payers to whom HMRC has given a notice requiring the pension payer to send to HMRC Form P45 or Form P46(Pen) on the commencement of a new pensioner’s pension.]

(1) On the death of a pensioner in respect of whom a code has been issued by the Inland Revenue, the pension payer must—

(a) complete Form P45 indicating in Part 1 that the pensioner has died, and

(b) send it to the Inland Revenue.

(2) The pension payer must comply with paragraph (1)—

(a) on the day on which the pension payer learns of the pensioner’s death, or

(b) if that is not practicable, without unreasonable delay.

(3) Paragraph (4) applies if the pension payer makes any relevant pension payments after the date of the pensioner’s death—

(a) before completing Form P45, or

(b) after completing Form P45 but during the tax year in which the pensioner died.

(4) The pension payer must, on making any such payment, deduct or repay tax as if the deceased pensioner were still alive and in receipt of a pension at the date of the payment.

(5) Regulation 37(2) to (6) applies to any relevant pension payment which—

(a) is made in a tax year following the tax year in which the pensioner died, and

(b) is not included in Form P45.

Textual Amendments

F17 Reg. 39(A1) inserted (6.4.2012) by The Income Tax (Pay As You Earn) (Amendment) Regulations 2012 (S.I. 2012/822), regs. 1(1), 8

Commencement Information

I4 Reg. 39 in force at 6.4.2004, see reg. 1