P45 for employment ceased on 31/12

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Yachtie

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Hi all,

I am in a bit of a dispute over the neccessity to issue a P45 to an employee whose employment has ceased on the 31/12. My work is somewhat related to payroll and as far as I am aware, an employee whose employment ceased on 31/12 needs to receive only their P60 as P45 would be pointless (no unused tax credits etc.). However, I may be wrong.

Your advice will be most appreciated.
 
ClubMan said:
Not sure why you think that a P45 is not necessary in this situation but as far as I know an employee is always entitled to a P45 when leaving a job. See CitizensInformation for example:
Click to expand...

Thanks ClubMan! I think it's not relevant because all your tax information is on your P60. P45 is relevant only if you leave employment mid-year as it shows used tax credits, tax and PRSI paid. 31/12 is the end of the tax year and you wouldn't have any unused tax credits. Figures on your P60 would show the total of your PAYE and PRSI contributions for the previous year. Does this make any sense?

ETA: I have searched the Revenue, Social Welfare, CitizensInformation and all sorts of other websites and they all state that when an employee leaves employment they are entitled to a P45. I know that but there is nothing about the 31/12 in which case I am convinced P60 preceeds P45.
 
If they are leaving they are entitled to a P45. If they are employed on 31st December then they are entitled to a P60. This employee is entitled to both as far as I know. In the time it took you to post here you would probably have done one up.
 
ClubMan is correct. A P45 is a CESSATION CERTIFICATE. To prove the employee LEFT you must issue a P45. That is the whole purpose of the document. Otherwise, if they go to a new job, Revenue will still think they are employed with you and the new employer will get a NIL certificate of tax credits. You'll then have the employer back to you for the P45 which you should have issued. I have encountered this situation a number of times over the years and have ( in my capacity as agent/accountant for the client employer ) always issued BOTH in such situations as you describe.

If you have any doubt, see page 90 of the Revenue's Employers Guide to PAYE which was recently issued on CD to every employer in the country. There it clearly states the following :-

[FONT=MyriadMM-It_565_600_]Important[/FONT]​

[FONT=MyriadMM_215_600_]The P60 certificate should [/FONT]
[FONT=MyriadMM_400_600_]not [/FONT][FONT=MyriadMM_215_600_]be given to an employee[/FONT]​
[FONT=MyriadMM_215_600_]who was not in the employment on 31 December.[/FONT]


[FONT=MyriadMM_215_600_]An employee who was in employment on 31 December[/FONT]
[FONT=MyriadMM_215_600_]and ceased that employment on 31 December should[/FONT]
[FONT=MyriadMM_215_600_]be given a form P45 and a form P60.[/FONT]​
 
Thank you all! I have just spoken to the Social Welfare and they said that P60 will suffice. I guess it depends on a case to case basis. The employer did not know that the person will not return to work in January and have issued only P60. Since the payroll software was updated for 2008, there is no way to go back and issue a P45 without wiping out all the work that was done in January. Bizzarely enough, it seems that we are all right on this one.
 
Yachtie said:
Thank you all! I have just spoken to the Social Welfare and they said that P60 will suffice. I guess it depends on a case to case basis. The employer did not know that the person will not return to work in January and have issued only P60. Since the payroll software was updated for 2008, there is no way to go back and issue a P45 without wiping out all the work that was done in January. Bizzarely enough, it seems that we are all right on this one.
Click to expand...


I find this extraordinary. The P45 is a Revenue PAYE document. You get it (blanks) from Revenue, not social welfare. You file it with Revenue, not social welfare. It records PRSI details but is not a Social Welfare document per se and how a social welfare person says its not necessary to issue a P45 on cessation of an employee is quite beyond me. Especially in light of clear Revenue directions as already posted. Anyway, The new employer can always file a P46 with Revenue instead. Hopefully the employee will get their correct credits in time.
 
Quote:
You are entitled to a P45 form when you leave work. If you experience any difficulty in obtaining a form P45 from your employer, you should notify the tax office.

Yeah! Notify the tax office and they will tell you that it is not their job to get the P45. Where this has happened a number of tax offices have done nothing and my clients have been forced to get a solicitor to obtain P45s.
 
simplyjoe said:
Quote:
Yeah! Notify the tax office and they will tell you that it is not their job to get the P45. Where this has happened a number of tax offices have done nothing and my clients have been forced to get a solicitor to obtain P45s.
Click to expand...

Would this possibly be situations where the employee didn't realise that they may not have been "on the books" with the employer since I see no reason for any employer not to give a P45 on cessation of a legitimate employment.
 
Some might do it because their affairs are not up to date and some might do it if they were in dispute with the employee. Yeah - there are people like that out there.
 
The Revenue Commissioners' PAYE Department confirmed that P60 alone is sufficient for the employee who left on the 31/12. They get all the information they need from the employer's P35 which was filed together with a balancing cheque.
 
Yachtie said:
The Revenue Commissioners' PAYE Department confirmed that P60 alone is sufficient for the employee who left on the 31/12. They get all the information they need from the employer's P35 which was filed together with a balancing cheque.
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This means that - not for the first time - Revenue are disseminating contradictory information so you may need professional clarification.
Graham_07 said:
ClubMan is correct. A P45 is a CESSATION CERTIFICATE. To prove the employee LEFT you must issue a P45. That is the whole purpose of the document. Otherwise, if they go to a new job, Revenue will still think they are employed with you and the new employer will get a NIL certificate of tax credits. You'll then have the employer back to you for the P45 which you should have issued. I have encountered this situation a number of times over the years and have ( in my capacity as agent/accountant for the client employer ) always issued BOTH in such situations as you describe.

If you have any doubt, see page 90 of the Revenue's Employers Guide to PAYE which was recently issued on CD to every employer in the country. There it clearly states the following :-

[FONT=MyriadMM-It_565_600_]Important[/FONT]​

[FONT=MyriadMM_215_600_]The P60 certificate should [/FONT]
[FONT=MyriadMM_400_600_]not [/FONT][FONT=MyriadMM_215_600_]be given to an employee[/FONT]​
[FONT=MyriadMM_215_600_]who was not in the employment on 31 December.[/FONT]


[FONT=MyriadMM_215_600_]An employee who was in employment on 31 December[/FONT]
[FONT=MyriadMM_215_600_]and ceased that employment on 31 December should[/FONT]
[FONT=MyriadMM_215_600_]be given a form P45 and a form P60.[/FONT]​
Click to expand...
 
ClubMan said:
This means that - not for the first time - Revenue are disseminating contradictory information so you may need professional clarification.
Click to expand...

Clubman, I absolutely agree! The employer in question is a good client of mine and I want to sort this out for them. I took the name of the Revenue employee I spoke to and she (allegedly) put a note on the company and employee record (the client and the ex employer) about the situation. I'll get the client to drop them a letter just to confirm the lot.

I remember a similar situation from a few years back and the outcome was the same, hence my earlier claims.

Thanks to all of you who took the time to reply and post links!
 
Yachtie said:
The employer in question is a good client of mine and I want to sort this out for them.
Click to expand...

For your own sake, you might be better off steering well clear of issues such as this unless you are in the business of advising your clients on their tax compliance obligations - which sounds unlikely from the tone of your earlier posts. Your client might not thank you if you unwittingly provide them with misleading "advice" and they suffer losses as a consequence.
 
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