New Employee Tax Code: No P45, No Checklist? Use 0T W1/M1

Q. We have a new Employee Who Did Not Present a P45 and Did Not Complete the Starter Checklist. Which FPS Starter Declaration and Tax Code Should We Use?

A: HMRC’s guidance in the PAYE Manual says that the starter declaration must be C and the tax code to use is 0T on a week 1 / month 1 basis. Starter declaration C, essentially, sets the employee up on HMRC’s systems with a secondary record, simply because HMRC do not know whether this is a primary employment or a second employment. Tax code 0T W1 / M1 means that the employee is not entitled to any personal allowances.

Use HMRC’s ‘Work out your new employee’s tax code’ tool for confirmation. Failure to return the starter checklist is an all-too-common event and the employer should do everything they possibly can to get the checklist completed prior to the employee’s first payday.

 

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