P60s. P45s. What are they and why do you get them?
If you are an employee and haven’t received a P60 yet, you should get one soon. The deadline for your employer to send you a P60 is 31 May.
P60s and P45s both contain details of your income and the tax you’ve paid. A P60 comes at the end of the tax year, while your employer should give you a P45 when you stop working for them.
Let’s take a look at both forms in more detail.
What is a P60?
A P60 details your tax position and all of the income you’ve received from employment during the last tax year. The tax year runs from 6th April to 5th April the following year. Your P60 explains what you earned, how much Income Tax and National Insurance you paid, as well as listing any deductions that were made or statutory payments (e.g. Statutory Sick Pay) you received.
What should I do with my P60?
First , check the information is correct. You are responsible for making sure HMRC have the correct information about you and that you pay the right amount of tax. If there are any errors, contact HMRC, so they can update their records.
Keep hold of your P60. You may need it. It can be used as evidence of your income and the tax you paid. You might need this information when applying for or renewing Tax Credits, applying for a mortgage, or claiming a tax refund.
A P60 can also be useful when opening a Personal Tax Account, especially if you’ve struggled to get the other evidence needed to verify your ID. A Personal Tax Account makes managing your tax easier.
What should I check on my P60?
The most obvious thing to check is you’ve paid the right amount of tax. A quick way to check is to deduct £12,570 from your total income. You should then multiply the result by 0.2. The result of this calculation should match the number in the total tax deducted for year box on your P60.
For example, if you earned £25,000: deduct £12,570 and you are left with £12,430. This is your taxable income. Multiply this by 0.2 and you are left with £2,486. This is the total tax you should have paid.
Please note, this calculation will only work if you’re income is below £50,270, your only taxable income is from employment, and you have no other allowances (such as marriage allowance). If it isn’t, check back here soon, for more information on calculating income tax or speak to an adviser if you want to check you’ve paid the right amount of tax.
You should also make sure all your income is included. If you changed jobs part-way through the year, make sure income from you previous employment is on your form. Be aware, if you currently work two jobs at the same time, you’ll get a P60 from each employer. You might want to speak to an adviser if you want further advice on this situation.
Our contact details are at the bottom of this page.
What if I don’t get a P60 or there are errors on the form?
If you’re employer cannot provide a P60, you should get in touch with HMRC who can provide the information on a P60 for you. The easiest way is to set up a Personal Tax Account. You can get help with this by contacting our HMRC team. Our contact details are at the bottom of this page.
You might also want to speak to you advisers if you think there’s something wrong with your P60. We can help you understand the information on the form and check if you think there are errors.
What is a P45?
A P45 is slightly different to a P60. Your employer should give you a P45 when you finish a job. While a P60 shows your tax and income for the whole of the previous financial year, a P45 only shows this information for the year-to-date. So, if you leave a job on 30th September, a P45 will show your earnings and the tax you paid between 6th April and 30th September.
What should I do with my P45?
Keep hold of your P45 until you start a new job. You should then give it to your new employer. Do this as early as you can, as any delays in getting accurate tax details to your employer can result in you being put on an emergency tax code. You’ll then end up paying too much tax.
Don’t worry, however, if you are late getting your P45 to your new employer. Any overpaid tax will be paid repaid in your next paycheck, after you notify HMRC of the problem.
I don’t have a P45, now what?
Contact your employer first. They are legally required to provide you with a P45 when you stop working for them. However, problems do arise and it is not always possible to get one.
Don’t worry, there are still things you can do if you cannot get a P45. This can happen when you are starting your first job, taking on a second job, or your employer won’t provide the form. In these cases, your new employer should use the Starter Checklist to gather the information they need to make sure you are put on the right tax code and pay the right amount of tax.
If you’re struggling to get your new employer to update your details, you can print the Starter Checklist for yourself by clicking here. Give this to your employer once you’ve filled it in, so they can provide the correct information to HMRC.
How do I contact your HMRC Advisers?
The easiest way to book an appointment is by emailing firstname.lastname@example.org and requesting a call back. Alternatively, call 0800 144 8848 to speak to a generalist adviser who can make a referral.
Disclaimer: This information was correct at the time of publishing on 28 March 2022 and is provided as a guide only. It is not a recommendation to take a specific action and we suggest you speak to an adviser if you have any doubt about how the law applies to you.