Taking on a payroll client mid-year: the handover checklist
A new payroll client in April is the easy kind: the year end is done and everyone starts from nothing. Take one on in October and you inherit six months of somebody else's work, and HMRC already hold their version of it. Everything below is about making your first submission agree with what has already gone in.
The short version. Settle who runs which pay period before anything else. Then get the year to date figures, the payroll IDs and the submission history from the outgoing provider, and reconcile them to what was actually paid to HMRC before your first run, not after it.
Before you say yes
Two things decide whether a handover is calm. The first is the cut-off. Agree in writing which pay period is the outgoing provider's last and which is your first. If you both submit for the same period, or neither does, the client hears about it from HMRC.
The second is access. If you'll be dealing with HMRC on the client's PAYE as their agent, start the authorisation on day one. HMRC post the client a code, which can take up to seven working days to arrive, and the client has to pass it back to you before it expires, usually within 30 days of the letter.
What to ask the outgoing provider for
| Ask for | Why it matters |
|---|---|
| Year to date figures for every employee: gross pay, taxable pay, tax, employee and employer National Insurance by category letter, student loan and pension | Your first FPS carries cumulative figures, and they have to follow on from the last submission HMRC received. |
| The payroll ID each employee was reported under | Keep them if you can. A changed ID that isn't flagged can read as a new job. |
| The last FPS and EPS actually sent, with HMRC's acceptance | It shows where HMRC's record stands, not where the old software thinks it stands. |
| What has been paid to HMRC this year, month by month, and what is still due | So your first payment neither repeats one nor misses one. |
| Current tax codes, and any coding notices received but not yet applied | A notice that arrived last week may be sitting in somebody else's inbox. |
| Student loan and postgraduate loan notices, and any attachment of earnings orders | Deductions that quietly stop when the paperwork goes missing. |
| Anyone on statutory sick, maternity, paternity or other statutory pay, with the dates and the average weekly earnings used | The calculation has to carry on unchanged. |
| The EPS position: statutory payments recovered so far, and whether Employment Allowance has been claimed for the year | The EPS is cumulative too. |
| The pension: provider, scheme access, contribution basis, opt-outs, postponements and the re-enrolment date | Re-enrolment comes round every three years, and a move is when that date gets lost. |
The payroll ID trap
HMRC's own guidance on what goes in an FPS is blunt. A payroll ID must be unique, and reusing one wrongly creates a duplicate record. If your software issues new IDs when you import the client, your first FPS needs the payroll ID changed indicator set, with both the old and the new ID, and the year to date figures have to cumulate from the previous submission.
Why it bites. Miss the indicator and HMRC can see two jobs where there is one. The tax code splits to match, and the PAYE bill stops agreeing with anyone's figures.
Nobody has left
A P45 is for an employee who stops working for the employer. Moving the payroll changes who runs it, not who employs anyone. So there are no P45s, no leaving dates and no new starter checklists. If the outgoing provider's software offers to close the employees down on exit, that's the wrong button.
An illustration
A two partner practice in Shrewsbury takes on a joinery firm with fourteen staff in October. The outgoing bureau sends a tidy closing balance for each employee, and it looks complete. What it doesn't show is a student loan start notice for one of the joiners that arrived in September and was never applied. No balance would reveal it. The practice only finds it because it asked for unapplied notices by name, which is why the table asks for documents, not just numbers.
The first run
- Load the year to date figures and reconcile them to the outgoing provider's last payslips and last FPS before you calculate anything.
- Rerun their final period in your own software. If your results match theirs, your setup is right.
- Check your first FPS shows figures that follow on from theirs, under the same payroll IDs or with the change flagged.
- After it goes in, compare the client's PAYE liability with what you expected. A difference now is a handover question; in six months it's an investigation.
Keep the history, not just the balances
HMRC expect payroll records to be kept for three years from the end of the tax year they relate to. Where records aren't complete, HMRC can estimate what's owed and charge a penalty of up to £3,000. That duty sits with the employer, not with whichever provider happened to hold the files, so ask for the full history in a form your client can still open.
A mid-year takeover you'd rather not run yourself?
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See how it works for practicesCommon questions
Do employees get a P45 when the payroll moves to a new provider?
No. The employer hasn't changed, only who runs its payroll. A P45 is for an employee who stops working for the employer.
Can the payroll IDs change when the payroll moves?
They can, but the first FPS after the change needs the payroll ID changed indicator, both the old and the new ID, and year to date figures that follow on from the previous submission. Otherwise HMRC may record a duplicate employment.
How long do the old payroll records need to be kept?
HMRC say three years from the end of the tax year they relate to. The duty is the employer's, so ask the outgoing provider for the full history rather than just the closing balances.
Read next
- What to look for in a payroll bureau, from an accountant's side
- Your payroll person just resigned. What now?
- RTI, the FPS and the EPS explained
- HMRC says you owe PAYE that you have already paid
- White-label payroll: what your client sees and what they do not
General information for accountancy practices taking on a payroll client part way through a tax year, not tax or legal advice. It reflects HMRC guidance published for the 2026/27 tax year as at October 2026, which can change. Please check the position for each client before acting.