What is a P60?
A P60 is an end-of-year certificate that tracks your earnings and tax status throughout the year. You’ll receive a physical copy from your employer or access it online through your HMRC personal tax account.
As an employer, it’s your legal responsibility to issue a P60 by May 31 each year. This article will explain why this is so important for compliance reasons.
Why Do I Need a P60?
A P60 is a document in the United Kingdom summarises an individual’s total income, tax deductions, and other financial details for a specific tax year. It is an essential document for taxpayers and is typically issued by employers to their employees at the end of the tax year, which in the UK runs from April 6 of one year to April 5 of the following year.
Here are key points about the P60:
- The P60 summarises an individual’s employment details for the tax year, including the employer’s name and tax reference and the employee’s income, tax deductions, and National Insurance contributions.
- The document shows the total taxable income earned by the individual during the tax year, including salary, bonuses, and other taxable benefits.
- It provides information about the total income tax deducted from the individual’s earnings over the tax year. This includes Pay As You Earn (PAYE) tax, the standard method of deducting income tax from employees’ salaries.
- The P60 also details the National Insurance contributions made by the employee during the tax year. This includes both the employee’s and employer’s contributions.
- The document often includes the individual’s tax code, determining how much income tax should be deducted from their earnings. It takes into account factors such as tax allowances and any particular circumstances.
- P60s are particularly important for individuals who file a Self-Assessment tax return. The information on the P60 is used to complete the tax return accurately.
- P60s can serve as proof of income for various purposes, including applying for loans, mortgages, or government benefits.
- Employers are legally required to provide a P60 to each employee by May 31, following the end of the tax year. This allows employees sufficient time to use the information for tax-related purposes.
- Individuals only need to submit their P60 to Her Majesty’s Revenue and Customs (HMRC) if instructed, such as when filing a Self-Assessment tax return.
- If a P60 is lost or damaged, individuals can request a replacement copy from their employer.
|What is a P60
|What can I use it for?
|to claim back overpaid tax
to apply for tax credits
as proof of your income if you apply for a loan or a mortgage
If you’re working for an employer on 5 April they must give you a P60. They must provide this by 31 May.
What is a P60: A Legal Requirement
A P60 is a vital document for employees, and it serves as evidence of their earnings, tax deductions and NIC contributions over the past year. It can also include additional information, such as student loan deductions and maternity pay (if applicable).
The P60 is essential for individuals who wish to file their Self Assessment tax return, apply for certain government benefits, or use it as proof of income when applying for loans and mortgages. This is why employers must issue P60s for all their employees by the end of May each year, either on paper or digitally.
If you are an employer, you must complete the deadline to avoid HMRC issuing you a penalty. This penalty ranges from a warning letter up to a hefty financial fine. The best thing you can do is to be prepared and keep up-to-date with the latest rules around P60s. You can get all the details from the HMRC website and our guide.
What to Do if You Don’t Receive a P60
If your employer does not provide you with a P60, it’s essential to take the following steps to address the situation:
- Contact Your Employer: Contact your employer to inquire about the missing P60. There may have been an oversight, and they may be able to promptly provide you with the document. Explain the importance of having a P60 for tax and financial purposes.
- Request a Replacement: If your employer cannot provide you with a P60, you can request a replacement. Employers are legally obligated to issue P60s to their employees. Politely remind them of this obligation and request that they issue you a replacement P60 as soon as possible.
- Check Your Online Payslip or Payroll System: Some employers provide digital copies of P60s through their online payroll or HR systems. If your employer offers this option, log in to your account to see if you can access your P60 electronically.
- Keep Payslips: While a P60 provides a comprehensive summary of your income and tax details for the entire tax year, your payslips provide similar information for each pay period. If you don’t receive a P60, your payslips can be substituted for financial or tax purposes.
- Contact HMRC: If you are still waiting to obtain a P60 from your employer, contact Her Majesty’s Revenue and Customs (HMRC) for assistance. HMRC can guide you on what to do in such situations and help you obtain the necessary information to complete your tax return.
- Keep Records: Regardless of whether you have a P60, it’s essential to keep accurate records of your income, tax deductions, and financial transactions throughout the tax year. This will help you complete your tax return accurately and address any discrepancies if they arise.
- Consider Legal Action: If your employer consistently fails to provide you with a P60 despite your requests and reminders, you may want to seek legal advice or assistance from relevant labour authorities. Employers are legally obligated to provide this document to employees.
What is a P60: a Record
At its heart, a P60 is just a record of your income, tax paid and National Insurance contributions for a specific tax year. As such, it is an essential piece of paperwork for PAYE workers. They use it to check if they have paid too much or need to claim back overpaid taxes.
The P60 also confirms any statutory pay (such as sickness, maternity, or paternity pay) you received during the tax year. It can also be used as proof of earnings when applying for a mortgage or loan.
Contact your employer if you have not received your P60 by May 31. They are legally obliged to issue you a document containing this information before this deadline. You can also view the information on your HMRC account online or by calling the HMRC helpline.
What is a P60: A Document
A P60 is an important document containing all your yearly tax-related information. It shows you your gross earnings, take-home pay, the income tax paid, and any national insurance contributions or statutory payments made to you.
The form also lists your PRSI class and details any student loan deductions you may have made. It is a summary of the information contained within each of your payslips from April 5 to the end of the formal tax year (April 6 to April 5).
Employees are legally obliged to get their P60 from their employer by May 31 or as close to that date as possible. They need this to file taxes, apply for mortgages or loans and record-keeping purposes. It also serves as a vital piece of evidence should you be audited by HMRC.
What is aA P60: A Deadline
HMRC tends to give its never-ending collection of forms cryptic names, including the P60. It’s a form summarising an employee’s pay and deductions for the tax year from April 6 to April 5. This form is given to employees at the end of each tax year and must be sent out by May 31.
You must complete the deadline to avoid being fined by Her Majesty’s Revenue and Customs (HMRC). An initial penalty of £300 is due, followed by an additional £60 every day after. This is why it’s essential to prioritise P60 issuing for the end of each tax year. Your payroll software should be able to produce the P60s for you, but you can also find templates on the HMRC website. The P60 is a crucial piece of documentation that can help your employees outside the workplace, too, if they want to claim back overpaid tax or take out a mortgage.
What is a P60 – Other useful links from our Knowledge Centre:
How to Manage Business Finances Correctly and Efficiently
Unlocking Business Potential: Strategies for Long-term Success
The Impact of Sustainability on Ecommerce Businesses
Remember to Compare Your Business Costs is here to help your business every step of the way from business advice, or saving you time and money on your business purchases such as: