PAYE and the end of year

I have a quick question on PAYE from an employers side.

We have recently taken on a new employee at the middle of Decemebr last. She will be paid monthly. I am wondering how we should take her allowances\credits in to account.

Do we take half of the month of december 2008 and the first half of Jan 2009 credits or just the whole months of Jan 2009? As yet we don't have her P45 so she will be on emergency tax as well.

I hope this makes sense.

firstly her P45 will be dated in the year 2008 so you can't use that for tax credits or cut offs. Once a tax year has passed, its gone. What is important is when she is going to be paid. In this case, payment in January so you are into the new tax year.

Secondly, best thing is the ring the tax office and explain you have new employee, give her PPS number and they should immediately put her on to your company's books on a week 1 basis and give you the relevant cut off and tax credit figures.

I did similar last week for 3 new employees and got their tax credits/cut offs over the phone no problem.

A P45 for the previous year allows you to use the same credits on a week one basis until a new cert issues.

From the Employers Guide to PAYE

7 Where form P45 relates to an earlier tax year

An employer who is given parts 2 and 3 of form P45 for the tax year ended on previous 31 December should act in accordance with paragraph 5. However, where the form does not relate to either the current year or to the previous year, part 3 should be completed and sent to Revenue and the emergency basis (Calculation of tax under the PAYE system parts 8 - 9) should be applied.

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