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What is a P46 Form and What is a Starter Declaration?

Updated: Dec 3, 2023

Usually, you complete a P46 form when you start a new job and your last P45 is not available. The P46 tax form is important because it helps you pay the correct amount of income tax. If you don't have a P45 or don't fill in a P46, your employer will usually apply an emergency number to your wages, possibly causing you to pay too much tax. However, it is no longer in use and has been replaced by Starter Declaration also known as Starter Checklist. You can study its details below.


Understanding the P46 Form: A Basic Overview

The P46 form is a crucial document in the UK's taxation system, primarily used by employers and employees. Its primary purpose is to gather information about a new employee who doesn't have a P45 form from their previous job. The P45 is a form that details an employee's salary and the taxes paid on it at their previous employment. In the absence of a P45, the P46 helps the employer determine the correct tax code for the new employee. This process ensures that the correct amount of Income Tax and National Insurance Contributions (NIC) are deducted from the employee's salary.


The Significance of the P46 in the Taxation Process

The importance of the P46 form in the UK taxation system cannot be overstated. It plays a critical role in maintaining the accuracy of the tax system, ensuring employees are taxed correctly according to their income and circumstances. By providing essential information such as previous employment details and tax status, the P46 form enables HM Revenue and Customs (HMRC) to update an individual's tax records accurately. This prevents any discrepancies in taxation, avoiding underpayment or overpayment of tax.


What is a P46 Form?


Who Needs to Complete the P46 Form?

The P46 form is typically required in the following scenarios:

  1. A new employee does not possess a P45 form from their previous employer.

  2. A person starts their first job and hence has no prior P45 form.

  3. An individual takes up a second job in addition to their main employment.

It's crucial for employees to understand when they need to complete a P46 form to comply with the UK tax regulations. Filling out the form correctly and promptly is imperative to ensure that their tax code and tax deductions are accurate from the start of their new employment.


How to Fill Out the P46 Form

Completing the P46 form is relatively straightforward. The form requires basic personal information, such as full name, date of birth, address, and National Insurance number. Additionally, the form asks for details regarding the employee's previous employment, current employment status, and whether they are receiving any benefits like a state pension or job seeker's allowance.


It's essential for the employee to provide accurate and complete information. Any inaccuracies can lead to incorrect tax calculations, resulting in potential issues with HMRC down the line.


Common Questions about the P46 Form

  • What if I have a P45 form? If you have a P45 form from your previous employer, you typically do not need to complete a P46 form. The P45 form should suffice to inform your new employer of your tax code and previous earnings.

  • Can I submit the P46 form online? Many employers now use online systems to submit the P46 form to HMRC. Employees can fill out their details electronically, which are then sent directly to HMRC by the employer.

  • How does the P46 affect my tax code? The information provided on the P46 form helps determine your tax code. The tax code is used by your employer to calculate the amount of Income Tax to be deducted from your salary.

  • What happens if I don't submit a P46 form? If you don’t submit a P46 form and don’t have a P45, your employer may use an emergency tax code. This could result in incorrect tax calculations, potentially leading to overpayment or underpayment of tax.


What Happens If an Employee Does Not Provide P46 Information?

If you are not able to provide p45 or p46 to your employer, then your employer may not be able to put you on the correct tax code. You may be subject to an emergency tax code (BR, OT), which could mean paying too much income tax until the correct information is provided.


P46

The Starter Declaration - Replacing the P46 Form


Transition from P46 to the Starter Declaration

As of recent updates, the P46 form in the UK has been replaced by the Starter Declaration. This change signifies a shift in how new employees provide their tax and employment information to their employers. The Starter Declaration is now the primary document for employees who do not have a P45 form from their previous job or for those starting their first job. Unlike the P46 form, which was a standard HMRC document, the Starter Declaration can be designed and branded by the employer, but it must still be completed by the new employee, even if they provide a P45​​.


Understanding the Starter Declaration


Who Should Complete the Starter Declaration

The Starter Declaration is applicable in several situations:

  • If you have a student or postgraduate loan.

  • When your personal details differ from those on your P45.

  • If you do not possess a P45.

  • For individuals temporarily working in the UK for an overseas employer​​.

Information Required for the Starter Declaration

Before starting the Starter Declaration, you need:

  • Your full address, including postcode.

  • Details of any student or postgraduate loan plan types.

  • Your passport number, if you are an employee temporarily in the UK by an overseas employer.

  • Your National Insurance number, if available.

The declaration also asks about any income received since April 6 from other jobs, pensions, or certain benefits like Employment and Support Allowance, Jobseeker’s Allowance, or Incapacity Benefit​​.


Completing the Starter Declaration

The Starter Declaration can be filled out online or as a printout. If the employer doesn’t provide this form, employees can complete it independently, even 'late', to avoid being placed on an emergency tax code (0T code)​​.


Importantly, individuals who don’t yet have a National Insurance number can still complete the Starter Declaration. They can start work by proving their right to work in the UK, and later provide their National Insurance number to their employer when they receive it​​.


Types of Forms and Statements


There are two versions of the Starter Declaration:

  1. An onscreen version that can be filled out and then printed or emailed to the employer. This version auto-generates the employee statement (A, B, or C) based on provided answers.

  2. A downloadable version that can be filled out by hand, where the employee must select the correct statement (A, B, or C).

Regardless of the form used, it's important to keep a copy for your records​​.



How to Fill Starter Declaration


Employee’s Personal Details

  1. Last name: Enter your surname.

  2. First names: Provide all your first names. Avoid initials or shortened versions.

  3. Sex: Indicate your sex as shown on your birth certificate or gender recognition certificate.

  4. Date of birth: Fill in your date of birth (DD MM YYYY).

  5. Home address: Write your full home address, including postcode and country.

  6. National Insurance number: If known, provide your National Insurance number.

  7. Employment start date: Enter the start date of your employment (DD MM YYYY).


Employee Statement


Q. Do you have another job?

  • Yes: Tick Statement C box.

  • No: Go to question 9.


Q. Do you receive payments from a State, workplace, or private pension?

  • Tick the appropriate box based on your circumstances.


Q, Since 6 April have you received payments from:

  • Another job which has ended, Jobseeker’s Allowance, Employment and Support Allowance, or Incapacity Benefit.

  • Yes: Tick Statement B box.

  • No: Tick Statement A box.


Student Loans


Q. Do you have a student or postgraduate loan?

  • Yes: Go to question 12.

  • No: Go to the Declaration.

Q. Do any of the following statements apply to you?

  • If you're still studying, completed/left your course after 6 April, repaid your loan in full, or are paying by Direct Debit, tick 'Yes' and go to the Declaration.

  • Otherwise, go to question 13.

Q. Select the correct student loan plans that apply to you.

  • Tick all that apply: Plan 1, Plan 2, Plan 4, Postgraduate loan.


Declaration

  • Confirm the information provided is correct, sign, and date the form. Give this form to your employer and do not send it to HMRC.

This checklist helps your employer to apply the correct tax code and student loan deductions based on your current circumstances.



Challenges and Considerations with the Starter Declaration


Potential Issues with Tax Codes

Sometimes, HMRC may overwrite the tax code generated by the Starter Declaration. This can occur, for example, if there's a delay in the old employer sending HMRC the required leaver information, making it appear as if the worker has two jobs. In such cases, employees need to contact HMRC to clarify their situation​​.


Overlapping Pay Periods and Tax Implications

If there's an overlap in pay periods between old and new jobs, employees might face underpayment of tax at the year's end. This is because they may receive personal allowances from both jobs for the same pay period, leading to receiving more than the standard personal allowance for the year​​.


The Starter Declaration is a vital document in the UK's tax system, replacing the P46 form. It's crucial for both employees and employers to understand its significance, the information required, and the potential issues that can arise. Employees must provide accurate information to ensure they are taxed correctly and to avoid any complications with HMRC. The next part of this article will further explore scenarios, examples, and detailed advice for both employers and employees regarding the Starter Declaration.


Scenarios and Practical Advice on the Starter Declaration

Scenarios and Practical Advice on the Starter Declaration


Scenario 1: First-Time Employee

Jenny J, born on 21 June 1994, starts her first job on 5 July 2022. She has recently completed her full-time studies and has been traveling abroad, without claiming any benefits or pensions. Jenny has a student loan, which she hasn’t started repaying. For someone like Jenny, completing the Starter Declaration is crucial as it's her first job. She needs to provide details about her student loan, ensuring her employer makes the correct deductions from her salary​​.


Scenario 2: Part-Time to Multiple Jobs

Caroline C, born on 31 August 1968, has been working part-time at a supermarket for several years. On 30 June 2022, she starts another part-time job at a local coffee shop. Since she doesn’t have a student loan, her primary concern while filling out the Starter Declaration is to ensure both her employers are aware of her multiple employments. This is important for calculating the correct tax code and avoiding being taxed incorrectly​​.


Scenario 3: Returning to Work After Redundancy

Mike M, born on 10 October 1981, was made redundant in 2020 and has been claiming Jobseeker’s Allowance. He starts a new job on 1 September 2022, ending his Jobseeker’s Allowance claim. Mike has a student loan and has set up a monthly repayment plan with the Student Loans Company. In his case, the Starter Declaration will need to reflect his recent unemployment period, the cessation of Jobseeker's Allowance, and his arrangements for student loan repayment​​.


Guidance for Employers and Employees

Employers play a crucial role in guiding employees through the process of completing the Starter Declaration. It’s important for employers to ensure that new employees, especially those unfamiliar with the UK tax system, understand the significance of this form and how to complete it accurately.


For employees, accurate completion of the Starter Declaration is vital. Missteps, such as selecting the wrong employee statement (A, B, or C), can lead to tax issues. Each statement corresponds to different employment circumstances and influences how tax codes are allocated. Employees need to be thorough and precise in providing their employment and tax-related information.


Concluding Insights

The Starter Declaration is an essential component of the UK’s tax system, replacing the P46 form. Its accurate completion ensures that employees are taxed correctly according to their specific circumstances. Both employers and employees must pay close attention to the details required in this form, as inaccuracies can lead to tax complications.

From first-time employees to those returning to work after a period of unemployment, the Starter Declaration caters to a wide range of employment scenarios. Understanding these nuances and responding accurately is crucial for maintaining tax compliance and financial stability in the UK’s dynamic workforce.



How a Tax Accountant Can Assist with Starter Declaration in the UK

In the UK, navigating tax affairs can be complex, especially for new employees or those unfamiliar with the system. The Starter Declaration form, which has replaced the P46, is a critical document for ensuring accurate tax deductions from your salary. Here's how a tax accountant can be invaluable in assisting with this process:


Expert Guidance and Compliance

A tax accountant is knowledgeable about UK tax laws and HM Revenue and Customs (HMRC) requirements. They can provide expert guidance on filling out the Starter Declaration, ensuring all information is accurate and compliant with current tax legislation. This is particularly beneficial for those new to the workforce or the UK, as the accountant can explain the nuances of the tax system.


Correct Identification of Tax Code

The Starter Declaration influences your tax code, which determines the amount of tax deducted from your salary. A tax accountant can help you understand which employee statement (A, B, or C) on the form applies to your situation, thereby ensuring you're on the correct tax code. This is crucial to avoid overpaying or underpaying tax.


Student Loan Declarations

For those with student loans, declaring them correctly on the Starter Declaration is essential. Different types of loans (Plan 1, Plan 2, Plan 4, or Postgraduate loans) have varying repayment thresholds and rates. A tax accountant can advise on which plan to declare and the implications for your take-home pay.


Assistance with National Insurance Number

While a National Insurance number is not mandatory for completing the Starter Declaration, it's crucial for accurate tax and National Insurance contributions. A tax accountant can guide you through the process of applying for one or what to do if you haven't received it yet.


Advice for Multiple Jobs and Pensions

If you have multiple jobs or receive a state, workplace, or private pension, the tax implications can be complex. A tax accountant can provide tailored advice on how to declare these on the Starter Declaration to ensure accurate tax deductions.


Navigating Tax Issues for Overseas Employees

For employees seconded to the UK by an overseas employer, the tax situation can be particularly challenging. A tax accountant can help navigate these complexities, ensuring compliance with UK tax laws while considering any international tax implications.


Preventing and Resolving Tax Discrepancies

Inaccuracies in the Starter Declaration can lead to tax discrepancies. A tax accountant can help prevent these by ensuring the form is filled out correctly. They can also assist in resolving any issues that arise, such as incorrect tax deductions or HMRC queries.


Ongoing Tax Advice and Support

A tax accountant’s role doesn’t end with the Starter Declaration. They can offer ongoing advice and support, helping you understand your payslips, tax codes, and any changes in tax legislation that may affect you.


Ensuring Privacy and Confidentiality

Tax matters are sensitive and require confidentiality. Professional tax accountants are bound by ethical standards to maintain the privacy and confidentiality of your information.


Saves Time and Reduces Stress

Dealing with tax affairs can be time-consuming and stressful. A tax accountant takes on this burden, allowing you to focus on your job and personal life without worrying about tax complexities.


In conclusion, a tax accountant is a valuable asset when dealing with the Starter Declaration and broader UK tax matters. Their expertise ensures that you are compliant with tax laws, pay the correct amount of tax, and have a reliable resource for any tax-related queries or issues. This professional guidance is particularly beneficial for those unfamiliar with the UK tax system, ensuring a smooth and stress-free experience with tax affairs.




FAQs about the Starter Declaration


Q1: Can I amend my Starter Declaration after submitting it to my employer?

A: Yes, if your circumstances change, inform your employer who can then update your details.


Q2: Does the Starter Declaration apply to self-employed individuals?

A: No, it is specifically for employees. Self-employed individuals have different tax reporting requirements.


Q3: How does the Starter Declaration affect temporary workers?

A: Temporary workers also need to complete it to ensure correct tax deductions.


Q4: Is there a deadline for submitting the Starter Declaration?

A: Ideally, it should be submitted before your first payroll date to ensure correct tax calculation.


Q5: What if I'm unsure about my student loan plan type?

A: Consult with your loan provider or a tax advisor for accurate information.


Q6: Should I complete the Starter Declaration if I'm returning to work after a break?

A: Yes, especially if your previous P45 is no longer valid.


Q7: Does the Starter Declaration include details about other deductions like pension contributions?

A: No, it focuses mainly on tax and student loan deductions.


Q8: Can I fill the Starter Declaration in a language other than English?

A: The form should be completed in English. Seek assistance if you need help with translation.


Q9: How do maternity or paternity leave affect the Starter Declaration?

A: Inform your employer about your leave, as it might affect your tax code.


Q10: If I have a tax dispute, can the Starter Declaration be used as evidence?

A: Yes, it can be part of the documentation in resolving tax disputes.


Q11: How do multiple job changes in a year affect the Starter Declaration?

A: You should complete a new Starter Declaration for each job change.


Q12: Can freelancers or contractors use the Starter Declaration?

A: It's primarily for traditional employment. Freelancers and contractors usually manage taxes differently.


Q13: What should I do if I receive an incorrect tax code after submitting the Starter Declaration?

A: Contact your employer or HMRC to rectify the error.


Q14: Is it mandatory for employers to provide the Starter Declaration?

A: Yes, employers are obligated to provide it to new employees without a P45.


Q15: Can I refuse to complete the Starter Declaration?

A: Refusal can lead to incorrect tax deductions, as your employer will use an emergency tax code.


Q16: Does the Starter Declaration impact benefit claims?

A: It doesn't directly affect benefit claims, but accurate tax records are important for eligibility assessments.


Q17: What if I have dual employment in the UK and another country?

A: Discuss this with your employer or a tax advisor, as international tax rules may apply.


Q18: Will my previous employment history be considered in the Starter Declaration?

A: Only if it affects your current tax year, as indicated in the employee statements.


Q19: Are there any penalties for providing false information on the Starter Declaration?

A: Yes, providing false information can lead to legal consequences and incorrect tax calculations.


Q20: How long should I keep a copy of the completed Starter Declaration?

A: Keep it for at least the current tax year as part of your personal tax records.



How PTA Can Help!

Our tax experts will help you claim your tax relief. We specialize in ensuring that our clients are tax efficient throughout their financial lives. We will guide you through all the numerous forms until you receive your full tax refund claim and contact HMRC on your behalf.


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