There are circumstances where employees leave the company and are issued a P45, following on from this the employee returns to the company and continues to work. Now that Real Time Information (RTI) is in use by the HMRC it’s not possible for an employer to restore a leaver and continue to process PAYE with the old employee details. This is because the employee number acts as a unique RTI reference number and when an employee leaves their P45 information is sent to the revenue across this number which then ceases their information for the company. If a leave date is taken out and then PAYE is processed it will be classed as a ‘payment after leaving’ and due to the HMRCs regulations this will be processed on a 0T tax code and this cannot be changed at all.
If an employee returns to the company the employer will have to treat them as a brand new employee (theoretically, treating them as if they have never worked there before) and create their details again, therefore creating a new employee number and new RTI details. This will allow you to process their PAYE information correctly with the correct tax code, etc