Do you know anything about the P45 form? In this piece, we will talk about the P45 form and what it entails. We all have a fair idea about how the Western countries conduct themselves economically. These countries are stringent with rules, regulations, laws, and their implementation. It is one reason why an expatriate has to undergo a set of steps before finding work in a company in a foreign land.
It mostly happens that the people from the third world countries go to the Western countries searching for better work opportunities. The same applies to the Gambian people who go abroad and find jobs there and then send money to Gambia from their earnings to their families for financial viability through a few online money transfer companies of repute such as ACE.
To find jobs in most countries, a job-seeker will have to provide necessary details to the employer on a form called P45. For the convenience of the readers, here are the details.
P45:- It is a tax form titled employee’s leaving work details. In the United Kingdom, when an employee is laid off, the employer gives this form to the leaving employee. It is part of the pay-as-you-earn (PAYE) system. In this PAYE scheme, National Insurance Contributions (NIC) and income tax are withheld from an individual’s salary and then directly transferred to Her Majesty’s Revenue and Customs (HMRC) on behalf of the employee. Now let’s see what information is available on a P45 form.
Important information on P45:- A P45 form will entail gross pay on the date of leaving your job; the amount of deducted tax from your wages; rate band and tax credit (41% or 20%); employment end date; total time duration of insurable employment; USC paid; USC rate; PRSI contributions paid; and PRSI class.
In what circumstances can P45 be received: – Keep in mind that P45 will be issued as soon as you quit. It covers resignations, terminations, redundancy, and retirement.
What if P45 is lost: – There is no replacement for the original P45 you have received once. So, beware of this important document. Besides, you will have to fill in all the necessary information on a Starter Checklist while finding a new job. And in case, there is little information available, you will stand a high chance to be put on an emergency tax code. The most intriguing Part of losing P45 is the dent your credibility will have in the sight of your new employer. Therefore, keep it safe.
Why is P45 important:- P45 is important because without this your employer cannot ascertain if you are given the correct tax code. This can lead you to pay more taxes than you are required. It is also required if you file new tax returns and many other benefits not directly related to your job.
P45’s validity: – Technically P45 is valid for a complete tax year in which it is issued. But, it must be kept safe for 22 months at least after the date of issuance. And keeping it safe for a lifetime is even more appropriate if you want to be safe in case of tax investigations begin at any point in time since HMRC reserves the right to conduct tax investigations up to 20 years after P45’s issuance date.
Different parts of P45:- P45 is made up of four different parts. Part one will be sent to HMRC, part 1A you will keep as an employee for your record and parts three and four will be submitted to your new employer on starting a new job.
Time to get a P45:- Your employer is legally bound to give you the document as soon as you quit in any way explained above. If your previous employer applies dilly-dallying tactics in the provision of P45, you reserve all the rights to contact the state agencies to take action and ensure the provision of this document.
Conclusion:- Hopefully, this article has provided you with all the basic and necessary information about what a P45 form is. This document is in use in the United Kingdom, which has a strong and welcoming economy and offers immense employment opportunities to the expatriates who travel to England and settle down there. If you analyze, this P45 form offers immense convenience to the employee and the employer, and also the government. These steps have ensured that the systems in England operate automatically without little involvement from the government officials. This marginalized involvement of government officials leaves little margin for corruption and inconvenience, which most the residents of underdeveloped countries are accustomed to. It is appropriate to keep this document safe for as long as you possibly can because it is, after all, that it is – a document. And placing it inside your files with other important documents will cost you nothing quite literally.