What's the starting declaration for, and which one do I select?
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"What's the starting declaration for, and which one do I select?"
When you newly hire a new person who's not got a P45, HMRC requires that you make a "Starting declaration" about that person's situation.
To set a person's "Starting declaration" during onboarding, when a person doesn't have a P45:
- First, tap: MenuPeopleInvite a person
- Once it's open, tap Add a new person, and enter the person's email and tap: Invite
- Next, fill in the person's name, and then tap: Next
- Then when asked about their P45, tap: No
- Normally, you'd fill in all the onboarding details, but for the example, skip your way through to the "Pay" settings page.
- Then set the person's pay rate, and tap: Next
- Next, because you said "No" to the P45, you'll be asked to select the person's: Starting declaration (if no P45)
- In most cases, you'll select the first option.
- The first option is for when it's their first and only job so far in the tax year.
- The second option is for when the person's had another job in the tax year, but don't have their P45. For example, if the person's lost their P45.
- The third option is for when the person's working another job, or have a pension, and don't have their P45.
- Read through the notes and decide which is best.
- Then once you've selected one, you'll see the person's Tax code is automatically filled in. It's filled in with a "best guess" tax code, according to rules set by HMRC.
- And finally, once you're ready, tap Next and continue with onboarding, as usual.
Keep in mind that:
- In all cases where a person does have their tax code from their previous job, leave the "Starting declaration" empty. And type in the tax code directly.
- If the person was issued a P45 from their previous employer, and has since lost their P45, then it's fine to still set their "Starting declaration", and go from there.
- In some cases, including where the person never had a P45, or the person lost their P45, the "best guess" tax code may need changing. If so, HMRC automatically does the update.
- If HMRC's systems detect a more suitable tax code, an "HMRC notice" is automatically issued and the person's tax code is automatically updated.
- Both you, and the person, get an email if the tax code is ever updated through an: "HMRC notice"
To learn more:
- About HMRC notices, watch the video on: HMRC notices
And that's it! That's everything you need to know about setting a person's starting declaration during onboarding, when a person doesn't have a P45!
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