As an employer, it’s important to gather all necessary information about your recently hired employee before the first Full Payment Submission (FPS). The new starter checklist is a form provided by HMRC that’s required in some situations when your new team member doesn’t have specific documentation after leaving another company.
It’s part of the hiring process and it’s important to know in which situations you need to complete this form, along with which information you should ask your new employee to avoid taxing issues.
By following the best practices outlined in this guide, you can ensure that your new hire’s payroll is set up correctly and efficiently. We will cover:
- What is an Onboarding Process?
- What is the New Starter Checklist and How is it Used?
- What is a P46 form and How is it Different? (Plus P45 and P60)
- How to Complete a New Starter Checklist
- Download a Free Onboarding Checklist
- More Essential Documents for New Hires
- Simplify the Recruitment Process with Factorial’s HR Software
The onboarding process refers to the time it takes for a new employee to be acquainted with all aspects of their new position and the new company. However, the onboarding process starts way before the employee signs their contract or sits on their office chair. For a successful onboarding process, the human resources director must think about making all candidates comfortable, by starting with the recruitment and selection processes.
A successful onboarding process will make the employees feel loved and more motivated. The process also improves the employees’ productivity and working environment, reduces absenteeism and lowers the company’s turnover rate. All these benefits arise by ensuring a new employee feels comfortable in your company.
There are many different types of onboarding processes, as it depends on how the company is managed and by whom. Nevertheless, there are some really important details to remember that will help you make your new employees feel valued from day one.
The new starter checklist is a form that must be completed by employers in order to gather information about their new employees. According to HMRC, you should fill out the new starter checklist if new employees do not have a P45, if they have a student loan, if their personal details differ from those shown on their P45, or if they have been temporarily sent to work in the UK by their overseas employer.
It is crucial for both the employee and employer to provide accurate information on the new starter checklist in order to avoid paying the wrong amount of tax or student loan deductions. Still, the starter checklist cannot be used to alter the employee’s tax code. However, the employee can utilise the “check your Income Tax online” service to notify HMRC of any changes that may impact their tax code.
P45, P46 and P60 are all PAYE forms related to employment and taxation in the UK. It’s important to understand the differences between them and how to use them to manage new talent at your organisation.
Firstly, a P45 is a form that an employee receives from their employer when they leave their job. It contains information about pay and tax deductions for the tax year. The P45 has four parts:
- Part 1 is given to the employee when they leave their job.
- Part 1A is retained by the employer for their records.
- Parts 2 and 3 are given to the employee and should be given to their new employer when they start their next job.
As the P45 provides the new employer with important information about the employee’s tax code and pay, this will help you to determine the correct amount of tax to deduct from the new hire’s pay.
A new starter checklist is another name for a P46. The names are often used interchangeably and the forms are both used at the start of a new job, but they are used in slightly different circumstances. A P46 is the form for standard situations, whereas a new starter checklist is a form that an employee completes if they do not have a P45 or if they have a student loan (regardless of whether they have a P45). The employee must give the completed form to their employer. It contains important information about their tax code and pay that the employer needs in order to complete their first Full Payment Submission (FPS).
Lastly, a P60 is a form that a team member receives from their employer at the end of the tax year. It shows the employee’s total pay and tax deductions for the year. The worker should keep their P60 for their own records, as they may need it for things like claiming back overpaid tax.
To properly complete the starter checklist, you’ll need to follow the best practices shared by HMRC. Here’s the step-by-step process to do it correctly:
- Get the new starter checklist form from the HMRC website.
- Have the employee fill in their details, including their name, address, and national insurance number.
- Have the employee indicate which statement applies to their employment situation:
Statement A: This is their first job since last 6 April and they have not been receiving taxable Jobseeker’s Allowance, Employment and Support Allowance, taxable Incapacity Benefit, state pension, or occupational pension.
Statement B: This is now their only job, but since last 6 April they have had another job, or have received taxable jobseeker’s allowance, employment and support allowance, or taxable incapacity benefit. They do not receive a state or occupational pension.
Statement C: They have another job or receive a state or occupational pension.
- Ask the employee to provide details about any student loans or benefits they are receiving.
- The employee must sign and date the form.
- Retain the completed form for your records and use the information to help complete the employee’s first Full Payment Submission.
It’s important to ensure that the new starter checklist is completed accurately and truthfully. Incorrect or misleading information could result in you or your new team member paying the wrong amount of tax or student loan deductions.
Our onboarding checklist for employees is sure to streamline the process of welcoming in new hires to your company so that they can hit the ground running.
In addition to the new starter checklist, there may be other forms that need to be completed when a new employee is hired. Depending on the organisation’s policies and the new member’s individual circumstances, these may include:
This document outlines the terms and conditions of the employee’s employment, including their job duties, working hours, salary, and benefits. But there are different types of employment contracts in the UK, including permanent contracts, temporary contracts, and fixed-term contracts you can use to secure the talent you trained.
Tax Code Declaration
This allows the employee to declare their tax code and any tax-free allowances they are entitled to. This key paperwork will help the employer to determine the correct amount of tax to deduct from the employee’s pay. Check our handy guide to tax codes to find the right ones.
If the organisation offers a pension plan, the newly hired team member may be required to enrol in the plan and make contributions towards their retirement. It allows the employee to make informed decisions about their retirement savings and gives the employer the necessary information to enrol the new team member in the pension plan.
The enrolment form should include details such as:
- The type of pension plan being offered (e.g. defined benefit or defined contribution).
- The employee’s contribution rate.
- Any employer matching contributions.
- The vesting schedule (i.e. the length of time the employee must work before they are fully vested and entitled to receive their full pension benefit).
It may also include information about the investment options available under the plan and any additional benefits, such as life insurance or disability coverage.
Health and Safety Forms
Health and safety forms are a crucial part of the new hire process and are directly related to the well-being of your team, allowing you to build strong employee relations.
These forms may vary depending on the nature of the employee’s work, but common examples could include risk assessment, manual handling assessment, and personal protective equipment assessment forms.
This help ensures that your new team members are aware of potential hazards in the workplace and know how to perform their duties safely.
There are still too many organisations that don’t address health and wellbeing properly. In fact, according to a report on health and wellbeing at work in 2022, only 51% of companies in the UK take a strategic approach to employee wellbeing. This negligence can lead to losing talent and extra costs to replace staff.
Recruiting and hiring new talent isn’t an easy task. You need to follow a legal process and ensure you have the paperwork in place. This is especially challenging for teams that are scaling, as the number of team members grows meaning more room for errors.
- Create a careers page for attracting candidates.
- Use custom-generated careers pages to step up your employer branding.
- Build tailored application forms.
- Ensure all candidates receive application responses.
- Send personalised job offers, application forms or pipeline steps.
- Centralise and automate your onboarding and offboarding processes.
- Build structured task flows for onboarding employees.
- Streamline the flow of responsibilities between employees throughout the onboarding and offboarding processes.
- Centralise and digitise new employee documents and personal information in a safe and secure system.
Overall, Factorial HR software can save employers time, reduce costs, and create a more efficient and effective onboarding for new hires.