Starter Declarations for New Employees
As previously announced HMRC are going to be placing greater importance on the starter declarations for new employees. HMRC now have a new interactive tool to help guide employees through the questions and enable them to answer with more confidence.
The starter declaration asks about previous/current employment or sources of income and about student loans. This evolved from the now obsolete P46.
| Declaration | Explanation | Resulting Tax Code |
|---|---|---|
| A | This is my first job since last 6 April and I have not been receiving Jobseeker’s Allowance, Employment and Support Allowance, Incapacity Benefit or a State, Works or Private Pension. | 1257L |
| B | I do not receive a State, Works or Private Pension. Since 6 April I have had another job, or received taxable Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit. This is now my only job | 1257L wk 1 |
| C | I have another job or receive a State, Works or Private Pension | BR |
| No Declaration Made | This is reported to HMRC the same as for declaration C but with a different tax code | 0T wk1 |
Student Loans
There are now four student loans including post graduate loan and it is possible some students may have more than one. If there is a student loan but the employee is unsure which one the default is to start with plan 1 and wait for HMRC to issue a student loan notice with the correct plan.
| Plan 1 | I lived in Northern Ireland when I started my course, or in England or Wales and started my course before 1st September 2012. |
|---|---|
| Plan 2 | I lived in England or Wales and started my course on or after 1 September 2012. |
| Plan 4 | I lived in Scotland and applied through Student Awards Agency Scotland (SAAS) when I started my course |
| PGL (postgraduate) | I started my Masters course on or after 1 August 2016 if living in England, or 1 August 2017 in Wales, or I started my Doctoral course on or after 1 August 2018 living in England or Wales. |
The amounts the student loans are paid back at are the same for Plan 1,2 or 4 but thresholds where payments start are different.
Summary
There is some complexity and the declarations are frequently not completed or completed incorrectly. HMRC will aim to quickly issue P6 tax notifications or student loan notifications but these are not always issued successfully so it is much better if the employee accurately completes their declaration.
The HMRC aid aims to assist a new employee through the checklist allowing a more successful outcome. The new checklist tool can be found here and our new starter form here.