Your situation
Leaving a job: your P45 and your tax code
The form that takes your tax history from one payroll to the next, and the emergency code you risk without it.
Should come back to you
£460.40
In your January pay (month 10), if the new code reaches payroll by then.
| Tax on 1257L M1 | £460.40 |
| Tax with 1257L over the same pays | £0.00 |
| Tax line on that payslip | −£460.40 |
Assumes no other pay earlier in the tax year. With a P45 from an earlier job, the refund depends on the tax already paid there.
Your employer should hand you a P45 when you leave, showing your leaving date, your total pay and tax from 6 April to that date, your tax code and personal details such as your National Insurance number (GOV.UK). It is the bridge to your next payroll: give Parts 2 and 3 of a paper P45 to the new employer and keep Part 1a. With it, the new employer can carry on your code cumulatively, counting the pay and tax already recorded. Without it, you fill in the starter checklist, and if another job already paid you this tax year the employer uses 1257L on a month 1 basis until HMRC sends a code, which can take up to 35 days. Leaving any earlier pay aside, for someone starting at £2,200 a month in November, two months on 1257L M1 take £460.40 where the cumulative code takes £0.00; the £460.40 gap comes back in the January pay once the proper code arrives. A lost P45 cannot be replaced.
Month 1 basis against cumulative
First pay, 1257L M1
£230.20
| First pay, 1257L cumulative | £0.00 |
| Difference on that pay | £230.20 |
| Free pay used by cumulative | £8,386.08 |
Cumulative counts the allowance of the months before the job started.
Rules read on HMRC’s texts by Radif Partners · Editorial policy · Method
What the P45 records
A P45 is a summary of your tax year so far at the job you are leaving. It shows the date you left, the total pay and the total tax from 6 April up to that date, and the tax code in use, together with your personal details and National Insurance number (GOV.UK). Your employer sends the same information to HMRC. Only employees receive one.
A paper P45 comes in parts. Parts 2 and 3 go to your next employer, and Part 1a is your copy to keep. If you stay with an employer until the end of the tax year, you get a P60 instead, which shows the tax paid on that job over the whole year.
Handing it to your next employer
The new employer uses the P45 to work out your tax code and to load your pay and tax to date into its payroll. That lets it continue on a cumulative basis: the tax on each pay is calculated on everything earned since 6 April, with the allowance of every month counted, including months spent between jobs. If you bring more than one P45, the employer uses the one with the latest leaving date and hands the other back to you.
Timing matters. If you give the P45 after your first payday, the employer keeps using the code reported on its first payroll submission, or the one HMRC has since sent, and adds your previous pay and tax where HMRC has not yet provided a code. If the code printed on the P45 itself is wrong, HMRC should correct it automatically after your first pay. The new job guide follows the first weeks in more detail.
Month 1 basis against cumulative
First pay, 1257L M1
£230.20
| First pay, 1257L cumulative | £0.00 |
| Difference on that pay | £230.20 |
| Free pay used by cumulative | £8,386.08 |
Cumulative counts the allowance of the months before the job started.
Starting without a P45
When the P45 is missing, the starter checklist replaces it. Employers also ask for it when your last job ended before 6 April 2025. The statement you tick sets the starting code: the full allowance on a cumulative basis if this is your first job since 6 April with no Jobseeker's Allowance, Employment and Support Allowance or Incapacity Benefit; the allowance on a week 1 or month 1 basis if you had another job this year that has ended, or one of those benefits; BR if you still have another job or a pension.
The month 1 basis is the expensive case. It gives one month of allowance per pay and ignores everything before, so you pay more until HMRC sends a proper code. The table shows the first pay of a job starting in November with no earlier pay in the year, using the 2026 to 2027 rates for England and Northern Ireland.
| Monthly pay | Cumulative code | 1257L M1 | Extra on month 1 basis |
|---|---|---|---|
| £1,800 | £0.00 | £150.20 | £150.20 |
| £2,200 | £0.00 | £230.20 | £230.20 |
| £3,000 | £0.00 | £390.20 | £390.20 |
| £4,000 | £0.00 | £590.20 | £590.20 |
The extra is not lost. HMRC usually issues the correct code once it has details from your new and previous employers, which can take up to 35 days from your start date (GOV.UK), and the cumulative code returns the excess on that payslip. The no P45 guide covers that path in full.
Between jobs and at the year end
If you stop working for a while and do not claim benefits, there is no payroll through which a refund could be paid, and GOV.UK says no refund is possible until HMRC has your income details, so make sure the P45 reaches either your next employer or, if you claim taxable benefits, Jobcentre Plus. After 5 April, HMRC gathers figures from employers, from pension providers and from the benefits office and writes between June and March if you paid the wrong amount (GOV.UK); the refund guide explains each payment route. To check what HMRC holds for the current year in the meantime, use your HMRC online account.