When creating a new employee record it is important to use the correct ‘Tax Code‘ to ensure that the correct amount of tax is deducted when you run the payroll.

Generally a new employee will hand you a form ‘P45’ which has been completed by his or her former employer and which will indicate what ‘Tax Code’ you should use, but where the new employee does not have a ‘P45’ then you will be required to raise a ‘P46’ and apply the ‘Tax Code’ indicated in the HM Revenue and Customs guide ‘Which tax code to use when paying your employee‘.