P46 Starter Checklist How to Get New Starter PAYE Right

A new employee starts on Monday, but payroll closes before they return the starter paperwork. By payday, the employee has been added without a usable P45 or completed declaration, and the first payslip shows the wrong tax treatment. The employee is frustrated, payroll has to investigate, and the correction becomes harder once the Full Payment Submission has gone.

That situation is common in small businesses because the P46 starter checklist often gets treated as ordinary onboarding paperwork. It isn't. It supplies the information payroll needs to set up PAYE correctly for a new employee who doesn't have a P45, and HMRC says it should be completed before the employee's first pay so the employer can work out the correct tax code for that first pay packet. HMRC's starter checklist guidance also makes clear that the checklist shouldn't be used after the employee has already been paid.

The practical challenge isn't only getting the form completed. It's knowing what to do when the form is late, incomplete or unavailable at the payroll cutoff. This guide explains the information the checklist collects, how the A, B and C declarations affect PAYE treatment, how to record the data in payroll software, and the HMRC fallback when you can't complete the checklist before payroll closes.

Introduction to the P46 Starter Checklist Today

The name P46 still appears in payroll conversations, search results and older internal procedures, but the current HMRC document is the Starter Checklist for PAYE. It is used when a new employee doesn't have a P45. The checklist helps the employer collect the details needed to establish the employee's PAYE position before the first payment is made.

For an SME, that makes the form a control point rather than a formality. A missing National Insurance number, an incorrect start date or an unanswered question about another job can affect how payroll sets up the employee. The completed information is then used in the payroll record and included in the employer's RTI reporting.

Why timing matters

HMRC's process is built around the first payment. The checklist should be completed before the employee's first pay, because the employer needs the information when preparing that pay and the related payroll submission. If the employee has already been paid, HMRC says the starter checklist shouldn't be used, so sending the form late isn't a substitute for dealing with the original payroll entry correctly. HMRC's official starter checklist instructions set out that boundary.

A good onboarding process sends the checklist with the employment contract and other new starter documents, then sets a clear deadline before the internal payroll cutoff. Payroll should check whether the employee has a P45 first. If there isn't one, the checklist becomes the route for collecting the PAYE information.

Practical rule: Treat the starter checklist deadline as a payroll deadline, not an HR paperwork deadline.

Skipping the checklist can leave payroll without the employee's declaration. That may force a fallback tax treatment, create an unexpected first deduction and require follow-up work. It can also produce avoidable employee questions at the exact point when the new starter expects their pay to be straightforward.

The rest of the process is manageable when responsibilities are clear. HR or the hiring manager issues the form, the employee completes the declarations, payroll reviews the answers, and the payroll system carries the relevant data into the first RTI submission.

What Information the Starter Checklist Collects and Why

The checklist asks for information that payroll needs to identify the employee and understand their tax position. Employees should complete it themselves, because the declarations concern their circumstances since 6 April and shouldn't be guessed by an employer.

Start with the identifying details

The form asks for core details such as the employee's National Insurance number and job start date. These fields help payroll match the employee to the correct PAYE record and report the employment accurately.

Ask the employee to check their National Insurance number against a trusted document or their HMRC records. Payroll staff shouldn't correct a number without verification because it looks familiar. If something doesn't match, ask the employee to confirm it before the record is finalised.

The start date also deserves a deliberate check. It should align with the employment record and the date used in payroll. A mismatch between HR records and payroll can make later investigation unnecessarily difficult, particularly when someone starts close to a payroll cutoff.

Ask the sensitive questions clearly

The checklist asks whether the employee has had another job or pension since 6 April. It also asks about student loan and benefit-related circumstances since that date. These aren't personal questions added for general background. They help payroll apply the correct PAYE treatment and identify deductions that may need to be handled through payroll.

Use neutral wording when requesting the form. A message such as “Please complete the HMRC starter checklist based on your circumstances since 6 April. If you're unsure about any answer, contact payroll before submitting it” is more useful than attaching a blank document.

Give the employee enough context to answer accurately:

• National Insurance number: Ask the employee to check every character before submission.
• Start date: Match the date to the agreed employment record.
• Previous employment or pension: Ask whether another job or pension has existed during the relevant period, not merely whether the employee worked for someone before.
• Student loan or benefit information: Ask the employee to read the relevant questions carefully and tell payroll if they need clarification.

Keep collection separate from interpretation

Payroll should collect the employee's answers without leading them towards a preferred declaration. The distinction between the declarations is dealt with by payroll after the completed form is received.

Supporting documents can help with identity and payroll administration, but they don't replace the checklist where HMRC requires the checklist because no P45 is available. Keep the completed form with the payroll records and restrict access to staff who need the information for payroll administration.

Understanding Starter Declarations and Tax Code Outcomes

The A, B and C declarations are the operational heart of the form. HMRC's internal PAYE manual confirms that the statement types from the old P46 were carried over into the equivalent Starter Checklist for RTI employers. That continuity matters because the declarations aren't decorative tick boxes. They act as a coded decision point in the payroll setup. HMRC's PAYE manual on starter declarations explains the relationship between the statements and RTI employers.

In plain English, the employee is describing their current position in relation to work, pensions and relevant income circumstances. Payroll then records the selected declaration and applies the corresponding treatment in the payroll system. The declaration must reflect the employee's facts, not the tax code the employee hopes to receive.

Reading A, B and C

Declaration A is associated with a first job position in the relevant tax year, where the employee hasn't had another job or pension circumstance that changes the starting position.

Declaration B covers a worker who has had another job or relevant income circumstance since 6 April but now has only this job. The chronology matters. A previous job that has ended isn't the same as another job that is still running.

Declaration C applies where the employee has another job or pension arrangement continuing alongside the new employment. It signals a different PAYE situation from a first job or a sole current job after earlier employment.

The table below summarises the decision logic without asking payroll staff to make the employee's choice for them.

The exact result depends on the payroll software and the information recorded. For a plain-language explanation of how tax codes operate, see this guide to UK tax codes.

Why wrong answers create first-pay problems

A wrong declaration can result in too much or too little tax being deducted from the first payment. The employee may have answered quickly, misunderstood the difference between an earlier job and a current second job, or assumed that a pension question didn't apply to them.

Payroll shouldn't “correct” an answer based on intuition. If the response appears inconsistent, ask the employee to review the form and return a corrected declaration. Keep both the original and corrected records where your process allows, or record what changed and when, so the audit trail explains the adjustment.

The main lesson is simple. The declaration connects the employee's circumstances to PAYE treatment, so accuracy at collection stage is more valuable than a quick form that needs repairing later.

How to Record and Submit Starter Information in Payroll Software

The completed checklist stays with the employer. You don't send the physical form to HMRC. Instead, payroll records the relevant information in the payroll system, and the system includes the employee's details in the employer's RTI reporting.

Start before the payroll cutoff, not on payday morning. A short internal deadline gives payroll time to identify missing fields, query an unclear declaration and check that the employee's record is ready for the first pay run.

A reliable entry sequence

1. Confirm the trigger. Check that the employee is new and doesn't have a P45 available. Don't issue the checklist as a routine replacement for every other payroll document.

2. Review completeness. Check the National Insurance number, start date and declaration answers. Look specifically for a missing A, B or C selection and unanswered student loan or benefit questions.

3. Create or open the employee record. Enter the employee's personal and employment details exactly as supported by the onboarding information. Payroll software such as Xero may use different screens and labels, so follow the product's current workflow rather than relying on an old screenshot.

4. Record the declaration. Select the payroll option that matches the employee's completed checklist. Don't choose a declaration just because it produces a more familiar-looking tax code.

5. Check deductions and payroll flags. Review student loan information and any other relevant settings before finalising the first pay. The checklist provides the employee's information, but the payroll operator remains responsible for checking that the software record reflects it.

6. Include the employee in the first Full Payment Submission. The starter information feeds into the payroll process and the first FPS. Before submission, compare the payroll record with the completed form.

Cloud payroll can reduce re-keying, but automation doesn't remove the need for review. A system can carry an incorrect declaration efficiently, so use a documented sign-off step for new starters.

A practical guide to submitting payroll to HMRC can help owners understand the wider submission process and the point at which starter information enters RTI.

The physical checklist should be stored securely with payroll records rather than sent to HMRC. UK payroll guidance describes retaining the information for the current and previous three tax years, so create a consistent filing location and retention routine. HMRC's employer help card also confirms that the checklist is an employer-held document.

Keep a simple audit trail around the cutoff. Record when the form was requested, when it arrived, who reviewed it, when the employee record was created and whether any correction followed the first submission. That record helps resolve employee queries without reconstructing the entire onboarding process from email threads.

Common Pitfalls and What to Do When Information Is Missing

The ideal process assumes the employee returns a complete checklist on time. Real payroll rarely works that neatly. A starter may join close to cutoff, fail to answer a declaration, or return the form after the payroll file has already been prepared.

Don't solve uncertainty by guessing

Guessing the employee's declaration is worse than recording a controlled fallback. Payroll staff may recognise that a new starter has worked elsewhere, but that doesn't tell them whether the earlier job is still active, whether a pension is relevant or how the employee should answer the HMRC question.

Using the checklist after the employee has already been paid is another weak workaround. HMRC says the form supports the initial payroll setup and shouldn't be used once payment has already been made. In that situation, retain the evidence of what happened, obtain the missing information promptly and follow the appropriate payroll correction process.

The same discipline applies to student loan questions. If the employee hasn't answered, ask them to complete the relevant part rather than treating silence as a negative declaration.

The fallback at payroll cutoff

HMRC's employer help card addresses the case many general explainers overlook. If the checklist can't be completed before payroll cutoff, place the worker on starter declaration C and use tax code 0T. This is a fallback for missing information, not permission to select C because payroll is busy.

The practical sequence is:

• Record the exception: Note that the checklist wasn't available or couldn't be completed before the payroll cutoff.
• Apply the fallback: Set the employee up using starter declaration C and tax code 0T, following the payroll software's configuration.
• Run the payroll and FPS: Include the employee in the required payroll reporting using the fallback treatment.
• Chase the checklist: Ask for the completed form immediately after the payment rather than waiting for the next routine onboarding review.
• Correct the record: Update payroll when the employee supplies the information and process any necessary correction through the normal payroll and RTI procedure.
• Explain the payslip: Tell the employee that the initial tax treatment was based on missing starter information and that payroll is reviewing the position.

This approach may create an uncomfortable first payslip, but it is more controlled than inventing an answer. The employee can then see that payroll has identified the issue and is taking a documented route to resolve it. For context on tax treatment that may arise when records need correction, use this explanation of emergency tax and HMRC.

Operational insight: A late checklist is a workflow exception. Label it, record it and resolve it. Don't hide it inside an assumed declaration.

The employer should also distinguish between a checklist that is late and a checklist that contains an answer that later changes. Those are separate events. A missing form calls for the fallback process; a corrected employee declaration calls for an update based on the new information.

Final Checklist for Compliant and Confident Onboarding

A dependable starter process is short enough for a payroll team to use every time. Before the first pay run, confirm that the employee either supplied a P45 or completed the HMRC starter checklist. If neither is available, record the exception and apply HMRC's stated fallback rather than guessing.

Use this final check:

• Confirm the document: Establish whether a P45 is available. If not, issue the current starter checklist.
• Check the essentials: Verify the National Insurance number, start date and employee details.
• Review the declaration: Make sure the employee selected A, B or C and that the answer matches their current circumstances.
• Check related questions: Confirm that student loan and benefit-related questions haven't been left incomplete.
• Review the payroll record: Compare the entered data with the completed form before finalising the first pay.
• Check the FPS: Confirm that the new starter is included correctly in the first RTI submission.
• Handle missing information visibly: If the checklist isn't ready at cutoff, record the exception, use declaration C with tax code 0T and follow up.
• Store the evidence: Keep the checklist and related audit notes securely for the current and previous three tax years.

The best onboarding process connects HR, payroll and the employee without making the new starter repeat information. A broader employee onboarding form checklist can help improve onboarding with Pebb, while payroll software can provide the controlled record and submission workflow.

For SMEs, cloud payroll and outsourced payroll support are practical options when internal deadlines are difficult to maintain. Stewart Accounting Services provides payroll, bookkeeping and related compliance support for SMEs, including payroll processes that collect starter information when a P45 isn't available.

Getting the P46 starter checklist right gives the business a cleaner first payroll, a clearer audit trail and fewer avoidable conversations with employees. Review your current onboarding workflow today, set a firm pre-cutoff deadline for starter information and arrange professional payroll support if your team can't manage the process consistently.

If a new starter is waiting for their first payslip, check whether the P45 or starter checklist is already on file. If it isn't, contact Stewart Accounting Services to review the setup and put a controlled payroll process in place.