P45 tax form to remain

Plans to replace to the current P45 tax form with a new ‘leaver statement’ have been scrapped following a consultation about HMRC’s introduction of its Real Time Information (RTI) programme.

HMRC had originally drafted the use of a leaver statement in RTI for use by employers when an employee moves jobs. However, following the consultation with employers and representative groups, the P45 will remain.

The RTI system is being introduced by HMRC to improve the operation of PAYE by making it easier for employers and HMRC to operate. It will mean that employers can report tax and National Insurance contributions instantaneously, rather than waiting until the end of the tax year.

A 12 month pilot programme of the RTI is due to roll out from April this year, with hopes that it will monitor staff movement more efficiently.

Stephen Banyard, acting director general for personal tax at HMRC, said: “We have been working closely with employers and stakeholders about the introduction of RTI. Employers told us to keep the P45 – which is exactly what we have done.

RTI is on track and we want to work in partnership with employers and other stakeholders to make its introduction as smooth as possible.”