Changing jobs? Watch your tax
The tax system for employees has changed. Most employers now send HMRC pay and tax details in real-time each payday. But what happens when you change jobs?
When you leave an employment, your employer should still give you form P45. This will normally show your pay to date and the tax deducted. It also shows your PAYE tax code.
You should give parts 2 and 3 of the form to your new employer and keep part 1A for your records.
What can go wrong?
The system sounds simple, but things can go wrong. One possible error is receiving too much tax-free pay in the month in which you change jobs. HMRC may not catch up with this until the end of the tax year, when you could find you owe some tax.
What you can do now
When you change jobs, make sure that you hand in your P45 to your new employer. If you don’t get a P45 from your previous employer, chase this up.
Check the figures on your first payslip against your P45. You should check:
- The tax code – if a tax code is shown on your P45, you would normally expect the same tax code for your new job. If this hasn’t happened, or you don’t understand your tax code, then you should contact HMRC.
- Your gross pay and tax to date figures. Where these are shown on your payslip, they should include what you earned in your previous job. If you are unsure, contact your employer’s payroll department. You may also need to contact HMRC.
- Does the tax deducted seem reasonable? If you are on the standard tax code for 2021-22 of 1257L, you should have £1,047 tax-free pay each month. Check that you haven’t receive this amount twice in the same month when you changed jobs.
Where to look next
For more information about being an employee, see the section What to expect as an employee.