What to do when an employee dies?

When you learn of the death of an employee you should complete a form P45, as if he had left your employment. You need to write 'D' in the box at the bottom of the form and send all four parts of the form to your Inland Revenue office.

Some payments may be due to the employee after the date of death.  These payments should be paid to the executors or personal representatives of the deceased employee.  Pay As You Earn deductions will need to be made, using tax code BR on all amounts paid after the completion of the form P45.  Such payments are treated like any other wages and should therefore be detailed on the PAYE working sheet (form P11).

If any payments are made in a later tax year than the one in which your employee died, you should deduct PAYE using the code BR and record details on a new form P11 in the name of the deceased employee. Again these payments should be made to the executors or personal representatives of the deceased employee.

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.