Tax Code Information

Tax Code information

In accordance with HMRC guidelines, the only documentation we can accept to apply the correct tax code to the client first income payment is either:

• The client’s P45 from the ceding scheme, or
• A completed HMRC New Starter Checklist Starter checklist for PAYE - GOV.UK)

P45

P45 information is applied to the clients first payment when a client has transferred their pension and continues to draw income from it. The P45 is provided to the client and receiving scheme as part of the transfer process. We are unable to use a tax code applied to another pension or source of taxable income. 

There have been instances where P45 details were not provided to either us or the client. This is often due to delays in the closure of the ceding scheme’s payroll or, in some cases, simple administrative oversight by the ceding scheme. Unfortunately, this can result in income payments being unnecessarily subject to emergency tax.

You will typically know whether a P45 is due to the client as part of the transfer out process. Where applicable, we’d be grateful for your assistance following up with the ceding scheme to ensure the P45 is issued promptly. This will help us avoid unnecessary tax deductions and ensure clients receive their income without delay.

Without either of the above documents, the default tax code 1257L M1 will be applied to the employee’s first payment, which may result in incorrect tax being deducted from their income. If you receive either document, please forward it to us promptly via a Freshdesk ticket.

If a client has paid too much tax, HMRC will calculate any refund due and notify us to pay the client accordingly. We are not informed in advance of how this amount has been determined. If the client requires further details, they will need to contact HMRC directly.

We appreciate your continued support in helping us deliver a smoother experience for clients. If you have any questions or need further guidance, please don’t hesitate to get in touch.