Form P60 - UK PAYE End of Year Certificate
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Form P60 - UK PAYE End of Year Certificate
What is a P60?
A form P60 is an end of tax year certificate that details how much taxable income an employee has received and how much tax has been deducted from their pay through the PAYE scheme. It also shows National Insurance contributions and any statutory pay taken out during the year.
Tax year for the purpose of Form P60 runs from 6th April in one year to 5th April the following year.
Employers in the UK must issue a P60 form to all their employees shortly after 5 April and no later than 31 May at the latest.
What is a P60 used for?
A P60 is a document which provides an overview of your earnings and taxes for the tax year. It also has details regarding statutory payments like sick pay, maternity pay and student loan repayments.
Employers have the option of providing employees with either a paper copy or electronic version of the form, depending on their business needs. Employees can then print off or submit it electronically to HMRC as part of their end of year PAYE processing.
For the employer, the P60 is part of an overall confirmation that they have been carrying out their PAYE duties correctly. This is essential if an employer wants to avoid a PAYE investigation and possible penalties for non-compliance.
As an employee, your P60 not only documents your earnings and taxes, but it can also be utilized to apply for tax credits or make a claim for means-tested benefits. Furthermore, it allows you to reclaim overpaid income tax.
Employees may use a P60 to apply for mortgage or loan, as well as prove their earnings to other financial institutions such as credit card providers. In fact, some mortgage companies will not provide a mortgage to an individual without it.
You will also need your P60 if you are one of those who are required to fill in a tax return at the end of each tax year. This might be the case where you have a large investment income, other self-employment income, you earn more than 100,000 pounds and various other situations.
Who needs to receive a P60?
As an employer, you must provide all employees on your payroll who were working for you on the last day of the tax year (5 April) with an end of year certificate. This form summarises their total pay and deductions during that year, including PAYE income tax, National Insurance contributions as well as statutory payments like maternity or paternity pay.
The P60 is an essential document for employee record-keeping and helps employers remain compliant with employment law. It contains vital information for both the employer and employees’ future needs, which could include claiming a tax refund or reclaiming overpaid National Insurance.
A sole trader or self-employed individual does not need to receive a one as they do not draw an income through PAYE.
What should I do if I don’t receive a P60?
The P60 serves as a type of End-of-Year certificate and often serves to prove an employee’s income; therefore, it’s essential that you obtain one.
At the end of every tax year, employers are legally required to issue their employees with a P60 form; usually in April or May. If your employer forgets to provide you with one at the end of May, make a formal request that it should be provided to you. It is unheard of for an employer in the UK to fail to provide the form to its employees by the due date.
How do I get a copy of my p60
It is important for an employee to keep their P60 in a safe place. If you lose your p60, there are several ways that you can get a copy of it. First, your employer can provide you with a replacement. If your employer is unable to, then HMRC can also supply you with a duplicate. For the latter, all that is necessary is your National Insurance number and access to a Government Gateway account.
What is the Difference between p45 and p60
When an employee leaves their current employment, their old employer must prepare and give them a P45. The form P45 should contain details of the employee’s name, address and National Insurance number. It should also contain the total gross pay and the tax deducted together with tax code to the date of living the old employment. The employee should then give Parts two and three of the form P45 to their new employer.
Employees typically keep a copy of their P45 form in case they need to demonstrate they’ve paid the correct amount in taxes. Unfortunately, National Insurance deductions and pension payments won’t appear on a P45 form, so make sure you obtain a copy of your payslip for confirmation.
To summarise, the main difference between form P45 and P60 is that P45 is given when an employee stops working for an employer while a 60 is given to an employee at the end of the tax year. Furthermore, a form P60 contain more detailed information about an employee’s earnings than a Form P45.
