A small business that I did the wages for has just been sold, and all employees taken on by the new owners (TUPE) The old owners were told by there solicitors NOT to issue p45's.
Does anyone know what information to give to the new employers?
One thing that has been suggested is print of p45's (but not issue them or inform HRMC) but to give the copies direct to the new employers so that they have all the information they require
I'd do the same as Tony. If they're on TUPE I believe their continuous employment is taken over and a P45 would not show this, neither would it show the NI contributions paid to date.
It really depends if the new entity paying the employees will have the same PAYE reference as the old entity. If it does then the solicitor's advice was correct. But if the new entity is a different PAYE reference the employees should all have P45s issued and hand them to the new employer. This is the case where TUPE comes into play, because their employment rights transfer from the old job to the new one.
With the same PAYE reference the new employers will need P11s, and P32, and any other documentation such as starter P45/P46s that is in the payroll file.
With a new PAYE reference the new employers need P45s to be issued by the old employer and someone will need to do a cessation P35/P14 for the old company.
The new employer may already be using their own PAYE reference, if they are an existing business that has bought over another, at a guess they probably will. In this case, then Tom is correct, the old company would have to close their PAYE account with HMRC, and pass over all details to the new company, however, this is just a back office paperwork exercise,
Just to reiterate, it is important that the employees are not to get any P45 notification, TUPE is very much geared towards employee rights, therefore employee contracts, terms and conditions including length of service are not affected.
To issue a P45 would indicate that they have actually been paid off and then started with another which is not the case with TUPE. If you issue a P45, this could potentially be used in tribunal action for unfair dismissal.
Also, if the new employer makes any of these staff redundant in the future, the employment start date used for redundancy calculations is what is shown on their original contract with their old firm, not the TUPE date.
