When a new employee has no P45, they fill in HMRC’s starter checklist and choose Statement A, B or C. Statement A means the current personal allowance code (1257L for 2026 to 2027) on the normal cumulative basis, Statement B means the same code on a Week 1 or Month 1 basis, and Statement C means code BR. If the employee gives you no statement at all, HMRC’s tool says to use 0T on a Week 1 or Month 1 basis.

When do you need a starter checklist?

The starter checklist replaced the old form P46. HMRC asks employers to get one when the new employee does not have a P45, or when the P45 is from a job they left before 6 April 2025, as GOV.UK puts it at the time of writing. The checklist is also used for student loans, so HMRC’s form says to complete it if the employee has a student loan whether or not they have a P45. An employer may ask for one even if a P45 is provided.

Typical cases include a first job, a first UK job, returning after a break, starting work after being self employed, and taking a second job. If the employee has already had their first pay, HMRC tells them not to use the checklist but to check their tax code online instead.

The checklist goes to the employer, not HMRC. You use it to set up the employee and report the starter declaration on your first Full Payment Submission.

What do statements A, B and C mean?

The statements come from regulation 46 of the Income Tax (Pay As You Earn) Regulations 2003, and regulations 47 to 49 set out what the employer does with each. The employee answers three questions: do you have another job, do you receive a State, workplace or private pension, and since 6 April have you had another job that has ended or received taxable Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit.

Statement Employee’s position Code to use
A First job since 6 April, and no taxable Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit since then Current personal allowance code, cumulative (1257L)
B Has had another job since 6 April but has no P45, or has received one of those benefits since 6 April; no other current job or pension Current personal allowance code on a Week 1 or Month 1 basis (1257L W1 or M1)
C Has another job that is continuing, or receives a State, workplace or private pension BR

The starter declaration letter you report on the FPS matches the statement (A, B or C). HMRC’s form notes that no other government or HMRC benefits need to be considered.

Why does Week 1 or Month 1 make a difference?

Normally tax is worked out on total income so far in the tax year, so an employee starting in October on a cumulative code gets the benefit of the allowance built up since April. On a Week 1 or Month 1 basis, tax is worked out on that week’s or month’s pay only, as if the employee were paid that amount every period of the year.

Statement B uses the non cumulative basis because the employee has had earlier pay or taxable benefits this year that the new employer cannot see, so giving them the allowance built up since April could hand out allowance already used. Statement C uses BR, which taxes all pay from this job at the basic rate, because the personal allowance is usually being used against the other job or pension. HMRC then issues the correct code once it matches the records. For how HMRC builds a full code, see PAYE tax codes.

What if the employee does not choose a statement?

HMRC’s Work out your employee’s tax code tool says that if you are unable to get a declaration from your employee, you use 0T on a Week 1 or Month 1 basis, with starter declaration C. You still report the employee: regulation 49 requires the employer to send the information even where the employee has not provided all of it, and to fill in what it can. If the National Insurance number is missing, leave the field blank rather than using a dummy number.

HMRC’s guidance for employees says that if they did not fill in the checklist, or filled it in wrongly, they may have been given a BR or 0T code, which HMRC may correct and send to the employer.

How does a P45 change the answer?

For a new starter with a P45, HMRC’s tool for 2026 to 2027 works like this:

  • P45 showing they left on or after 6 April 2026: use the code on the P45 with starter declaration B, or declaration C if the code includes BR, 0T, D0 or D1.
  • P45 showing they left between 6 April 2025 and 5 April 2026, code including BR, 0T, D0 or D1: use the P45 code with declaration C.
  • Same period, any other code: if they start before 25 May 2026, keep a code ending L, M or N (declaration B); if they start on or after 25 May 2026, use 1257L on a Week 1 or Month 1 basis with declaration B.
  • P45 showing they left before 6 April 2025: ignore the P45 code and use the checklist statements.

If an employee hands over two P45s, use the one with the latest date and give the other back. If both have the same leaving date, use the one with the higher tax free allowance, or the smaller additional pay for a K code. The P45 itself must be checked: totals of pay and tax to date are blank if the Week 1 or Month 1 box is marked.

What about employees seconded to the UK?

A separate expat starter checklist uses different statements, also set out in regulation 46:

  • A: intends to live in the UK for 183 days or more: current personal allowance code.
  • B: intends to live in the UK for less than 183 days: current personal allowance code on a Week 1 or Month 1 basis.
  • C: will work inside and outside the UK but live abroad: current personal allowance code on a Week 1 or Month 1 basis.

An employee who is an EU, EEA or Swiss citizen gets the current personal allowance code. Where HMRC has agreed a modified PAYE scheme (EPM6), the PAYE Manual at PAYE82008 applies instead. Where an employee will work abroad for part of the year, the employer may also be able to operate PAYE on only part of their pay; see section 690 directions.

What if the checklist or P45 arrives after the first payday?

If HMRC has already sent you a code, use it, and deduct any student loan repayments from the employee’s start date. If not, a late starter checklist only updates the starter declaration: you keep using the code from your first FPS until HMRC sends a new one. A late P45 is used to work out the code, and if it shows a leaving date after 5 April 2025 you also update total pay and tax to date. Do not report another start date.

How does this play out, and what goes wrong?

Illustration only. Sam starts on 1 November 2026, paid monthly. Sam worked elsewhere from April to July 2026 but has lost the P45, has no other job and no pension. That is Statement B, so payroll uses 1257L M1. Had Sam been out of work since before April with no taxable benefits, Statement A would apply and 1257L would run cumulatively. If Sam still worked weekends in a bar job, Statement C would apply and the code would be BR.

Common mistakes:

  • Using 0T or BR for a Statement A or B employee, which overtaxes them until HMRC corrects the code. Employees who have overpaid can see claiming tax back.
  • Treating Statement B as cumulative and giving away allowance already used.
  • Skipping the student loan questions; if the employee cannot say which plan, HMRC says use Plan 5 until you get a start notice (SL1).
  • Not keeping the checklist: the information must be kept for the current and next three tax years.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.