Tax codes to be used for new employees

When you take on a new employee, you must get specific information from them and report it to HM Revenue & Customs (HMRC) the first time the new employee is paid. Usually most of the information is available on the new employee's P45 which get issued by their previous employer.
However there may be occasions when the new employee won't be able to give a P45. In such cases, still you must use the correct tax code and report their details to HMRC via a Full Payment Submission (FPS) the first time you pay them.

If your new employee doesn't have a P45, you must ask them to submit a declaration, in which they select one of the following situations that apply to them. According to the situation they choose, the tax code given against the respective criteria should be applied : 

• This is their first job since last 6 April and they have not been receiving taxable Jobseeker's Allowance, Employment and Support Allowance, taxable Incapacity Benefit, state pension or occupational pension (1000L cumulative)
  
• This is their only job, but since last 6 April they have had another job, or have received taxable Jobseeker's Allowance, Employment and Support Allowance or taxable Incapacity Benefit. They do not receive state or occupational pension  (1000L on a week 1/month 1 basis)
  
• They have another job or receive a state or occupational pension (BR cumulative)
  

You must keep a written record of their answers for the current and previous three tax years, and the information should be reported to HMRC via the FPS. Where the employee doesn't complete the starter declaration as above, the tax code (0T week1/month1) has to be applied.