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What's the starting declaration for, and which one do I select?

Starting declaration3:18

"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:

  1. First, tap: "Menu", "People", then "Invite a person"
  2. Once it's open, tap Add a new person, and enter the person's email and tap: Invite
  3. Next, fill in the person's name, and then tap: Next
  4. Then when asked about their P45, tap: No
  5. Normally, you'd fill in all the onboarding details, but for the example, skip your way through to the "Pay" settings page.
  6. Then set the person's pay rate, and tap: Next
  7. Next, because you said "No" to the P45, you'll be asked to select the person's: "Starting declaration (if no P45)"
  8. In most cases, you'll select the first option.
  9. The first option is for when it's their first and only job so far in the tax year.
  10. 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.
  11. The third option is for when the person's working another job, or have a pension, and don't have their P45.
  12. Read through the notes and decide which is best.
  13. 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.
  14. 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:

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!

Updated: Tue, Feb 20, 2024.

© 2020–2024 1st Money UK Holdings Ltd. All rights reserved.