Introduction

We know how time consuming it can be when taking on new employees or agency workers, and completing all the admin that comes with it. We want to make this easier for employers and help them to get their new starters on the correct pay sooner.

We know you play a vital role in advising and supporting employers. This resource pack has been designed to provide information that we think is important for your networks, and we hope that you’ll be able to use it as part of your communications. Thank you for your continued support.

How HMRC process data

Stakeholders have told us that it’s useful to know how we process new starter data, as this helps them understand what we need from employers.

When we receive ‘in-year’ and ‘end of year’ information, the following steps are carried out to match an individual to their records and determine the tax code:

1. Once the payroll information is submitted, we see if we can match key employer submitted data with the individual’s National Insurance account where we compare the following details:
   • National Insurance number
   • surname
   • forenames
   • date of birth
   • gender

2. If there is a match, HMRC associate this information with the correct National Insurance account, allowing us to issue the right tax code at the earliest opportunity.

3. If we can’t find a match at this stage, we will try and trace the correct National Insurance number by using the employer submitted surname, forenames, date of birth and gender.

4. If there is now a match, we associate this information with the correct National Insurance number account.

5. If there is still no match, we will investigate this further until the correct National Insurance account is found, and the payroll information can be associated.

As you can see, it’s really important that accurate information is provided at the earliest opportunity. In particular, submitting the correct National Insurance number speeds up the process and allows us to correctly match an individual to their records and issue an accurate tax code to the employer.

Key messages for your networks

We’ve identified a number of ways that employers can get their new starters on the right tax code sooner, so they don’t have to deal with as many payroll queries. Here’s some messaging on the behaviours we’re hoping to encourage, and some helpful tips too:

Obtaining personal details and entering them accurately 

It’s really important that you get accurate information and enter it in the correct format. HMRC use this data to match the new employment to their Pay As You Earn (PAYE) records – which helps them to get taxed and paid correctly. 

To support you when gathering this information from your future employees and agency workers, here are the details you’ll need from them, and how to enter them on your returns in future:  

Name

• enter their full and official forenames and surname, in the correct order – include their middle name in full, if they have one
• double-barrelled forenames should be entered in the forename box and if your employee/agency worker has a second forename, enter it in the appropriate box – if your software only provides a single forenames field, enter it after the forename separated by a space
• double-barrelled surnames should be entered in the surname box
• enter their title (for example, Dr or Miss) in the title box only
• do not include any punctuation at the end of forenames and surnames

Date of birth

• include the day, month, and full year of birth (for example, 05/05/1985)
• always provide the correct date of birth – do not enter a default date or incorrect date, as this could mean the employee/agency worker gets the wrong pay, and cause you more work

National Insurance (NI) number

• if they don’t know their NI number, the quickest and easiest way for them to access their NI number is through the HMRC app
• only enter your employee’s/agency workers’ correct NI number – if you don’t know the correct number, don’t enter a default or incorrect number, leave the box blank

Checking your employee’s and agency worker’s details – the best way to make sure you’re submitting the correct details about your workers, is by making sure they exactly match their official documents. Examples of these include their passport, UK driving licence and birth certificate.

When there’s no P45 – use the digital starter checklist

Get your new employee or agency worker to complete the digital starter checklist before they start – they can send you the completed version digitally to make it even easier.

Ask them to complete the starter checklist at the same time you ask for their bank details – they’re more likely to do it this way and see the link with getting the right pay  Don’t wait for a P45 – if your new employee/agency worker can’t get their P45 in time for your payroll run, that’s fine – the starter checklist will tell you the right tax code to use temporarily.

Make sure you’re issuing P45s to employees and agency workers leaving your organisation – this will help the induction process in their next job.

Use the right tax code with starter declaration code C 

You should not use any tax code other than BR or 0T with starter declaration code C. If the starter checklist shows that your employees or agency workers should be on starter declaration code C, use tax code BR for them. If they’re unable to complete the starter checklist and don’t have a P45, use starter declaration code C and the tax code 0T.

Why employers should care about providing the right details

The details that you enter in the first Real Time Information (RTI) return for your new employee/agency worker are important, because HMRC use them to determine the amount an individual is taxed and match them to their existing PAYE records. This includes the starter declaration code, tax code and their personal details (name, National Insurance number and date of birth).

If this information is wrong, HMRC may not tax them correctly straight away. This means additional work for you – amending your payroll later on – and the wrong pay for your worker. It could also impact them in other ways too, such as affecting their claim for Universal Credit.

Top tips for new employees and agency workers

Starting a new job sometimes means contacting HMRC for information which can be accessed in just a few clicks through the HMRC app. Anyone can access their employment details through the app. This includes their 5-year employment history and income, National Insurance number and tax code.

This is the quickest and easiest way for your new employees/agency workers to access the details they need to share with you. It can help speed up the recruitment process and security checks significantly, as new recruits don’t have to call HMRC and wait 15 days for information to arrive in the post.

To help your new starters get into their roles faster, please encourage them to download the HMRC app during onboarding. They can use this once in the role too to monitor their pay and taxes.

Social media content for you to share

Example 1

Over 2 million employees and agency workers were put on the wrong tax code last year.

In just a few clicks, you can find the correct starter declaration and tax code for your new workers by using our starter checklist.

Complete the digital checklist today and help your new starter get on the right pay

Learn more on GOV.UK: www.gov.uk/guidance/starter-checklist-for-paye

Example 2

Starting a new job? Help to make sure you get paid the right amount by giving your employer the correct:

• name
• date of birth
• National Insurance number

Find out more on GOV.UK: www.gov.uk/guidance/starter-checklist-for-paye