Payroll (and in particular the issuing of P45s, P60s, etc.) is one of the major dislikes of business owners who run their own small or medium-sized businesses.
Clients often ask their accountants “Why do we need to print out P45s for leavers? Why can’t we simply email them?”
And the answer used to be that we agree it doesn’t make sense but HMRC say you have to print them (and there were even rules on the type of paper you had to use!).
Often an ex-employee will ring saying they need it today but can’t pick it up and can’t wait for you to post it. If they don’t have it in time they will be on emergency tax at their new employer and will struggle to meet their bills and provide for their family. This is the pressure you don’t want on your shoulders!
Add to this the cost of printing, posting, and stationary costs can make this unnecessarily expensive and time-consuming.
This is particularly relevant in a day and age where HMRC are encouraged to be paperless and hi-tech with RTI (Real Time Information).
It appeared the concern from HMRC was that an emailed P45 could be printed off a number of times and used more than once. In the age of scanners, smartphones, etc., this concern is unnecessary because if someone wanted to copy an existing P45 it would be extremely simple to do and if they wanted to edit it or make up their own they could do that too, but would soon be found out due to the submission from their new employer.
It does now seem that this approach has changed and you can email P45s instead of printing them!
In the June 2015 HMRC Employers Bulletin it states:
Form P45 can be issued to employees electronically
Until recently, our understanding was that employers could not provide Parts 1A, 2, and 3 of form P45 to a departing employee electronically. However, recent legal advice has confirmed that the relevant PAYE Regulation governs the electronic transmission of information to and from HMRC and not between the employer and employee. You must however ensure that you provide P45 information to the employee in the correct form or type of document.
To see the Full Bulletin:
If you are looking for an accountant to take away the stress of payroll, you can get in touch here or call: 0808 281 0303.