If you are running a small business or a limited company with employees, you will need to get acquainted with a P60 form. Here, Dannielle Stapleton MAAT from Orange Genie brings you a guide to the P60 form, addressing what it is, when you would need one and where to get one.
What is a P60?
A P60 (or End of Year Certificate) is an official document from your employer showing a summary of your pay and deductions in the tax year. Each tax year runs from the 6th April to the 5th of April in the UK.
When will I receive my P60?
Your employer (or the Department for Work and Pensions for those claiming taxable benefits such as Jobseekers Allowance) must provide this to you by the 31st May following the end of the tax year and can be issued to you in paper or electronic format.
The only time that you would not receive a P60 from your employer is if you left the employment during the tax year and they issued you a P45 instead.
What is included on the P60?
You will find the following information on your P60:
- Your name
- National insurance number
- Gross pay
- Tax paid
- National insurance contributions from current employment
- Statutory pay
- Student loan deductions
Why would I need a P60?
You may need your P60 for any of the following reasons:
- Applying for a mortgage, loan or property rental – The P60 is required as evidence of your ability to repay the loan or make future payments
- Applying for tax credits
- Claiming a tax refund
- Completing a self-assessment – The 31st May deadline for receiving a P60 gives you plenty of time to check the details before filing your tax return
- Querying your tax code
So this is a handy piece of paperwork to keep hold of!
What should I check for on my P60?
You would need to check that your employer is deducting the correct NI from your pay and using the correct national insurance number.
You may receive more than one P60 if you have multiple jobs and checking that the earnings have been consolidated to show the total income is important so that you aren’t overtaxed.
You may receive personal tax allowances such as marriage allowance or blind persons allowance, you would want to check your P60 to make sure this has been claimed for correctly and in full.
What happens if I lose it?
If you lose your P60, you would need to obtain a copy from your employer; this is not something that you can request from HMRC as it is not actually filed to them.
Do I get a P60 as a limited company director?
If you run your own Limited Company and pay yourself a salary, it is you that needs to issue the P60 to yourself, being that you are the employee and employer. Depending on the software that you are using, this may be automatically available to you once your payroll has been completed for the year.
If your limited company accountant runs payroll for you, you should speak to them about how to get your P60 before the 31st May deadline.
Do I get a P60 as a sole trader?
If you are working as a sole trader, or self-employed and do not pay yourself a salary through PAYE, then you will not need to issue yourself a P60. However, if you employ people to work for your sole trader business and pay them through PAYE, you will need to issue your employees with a P60.
Employers failing to issue a P60 by the deadline of the 31st May could face penalties, however, this depends on if it is reported and enforced. HMRC do have the right to charge an initial penalty of £300 for late issuing and an additional £60 per day for every day that it is late.
If, as an employer, you show action has been taken to remedy the lateness, HMRC would be unlikely to impose the penalties.
More tax rates and allowances and the records the self-employed need to keep.
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