Completing the Starter Details (Payroll UK)

When a candidate starts with an agency, and if they are to be taxed under PAYE, a starter checklist document must be completed by the payee to provide their new employer with enough information to apply relevant statutory deductions relating to their employment situation.  The starter checklist must be completed even if the candidate has supplied a P45(1).  The information in this screen is then sent to the HMRC on an FPS and cannot be changed in this screen once it has been submitted.  

When a payee record is created with a tax type of PAYE, the first tab displayed will be the Starter Details where you can enter the information supplied on the starter checklist document given to the employer by the candidate.  After you have saved the new payee, when you return to the payee record again, the initial tab that will be displayed will change to Payee Details.  This is because the Starter Details information only needs to be completed when the payee is first set up.

The Starter Details screen is divided into 3 sections:

Starter Declaration

The payee needs to indicate what their employment status is to notify the employer of the initial tax code that should be used, should a P45(1) is not supplied.  The starter declaration category will be sent to the HMRC on the first FPS that the payee is submitted on.  You will be unable to save the payee record until a declaration has been applied.  A declaration can be changed up to the point they are processed through a pay batch. 

Where the payee type is PAYE, the user must make a selection.  Where the payee type is Deemed Contractor, declaration C (BR) will be the default as this is the standard suggested by the HMRC.  This can be changed if required.

When applying a starter declaration, this will initialise the HMRC Details tax code in the Payee Details tab.

There are 4 declarations and depending on which statement the payee has selected will define the tax code used.  The declarations refer to the tax codes supplied by the HMRC for each tax year:

A - Personal tax allowance cumulative

B - Personal tax allowance on a week 1/month 1 basis

C - Basic Rate

No statement selected - 0T on a week 1/month 1 basis

Student Loan/Postgraduate Loan

If the payee has indicated that they have student loan and/or a postgraduate loan, this will generate the student loan/postgraduate loan deductions.

P45 Details

If the payee has supplied a P45, the details can be entered and will be used as part of the tax calculation.  The tax code will also override the starter declaration initial tax code in HMRC details in Payee Details tab.  The previous earnings and tax will be updated in the payee's year date figures for the current tax year. 

You can validate the P45 figures supplied by clicking on Validate P45 Tax  and if they are not correct, you can opt to use the correct figures.

If a P45 is given after the first pay batch is generated for the new payee, the P45 data should not be applied as the HMRC would have been notified of the tax code that has been used.  The HMRC will send a P6 notification to confirm any change to the tax code and previous earnings and tax.  Please refer to the HMRC guidance here.  However, if the previous earnings and tax require updating, the figures can be applied in the Year to Date Summary screen.