Tax can be a perplexing business, and all those P-numbered forms can get confusing. We’re here to focus on just one of them. So what is a P60 form? Well, it turns out it’s a pretty handy document.
If you’re an employee, you should get a P60 every year. Let’s find out what it does, and how you can put it to good use.
What does it mean when you get a P60?
The basic P60 meaning is simply that you’re an employee who’s been paid by an employer. You’ll probably fall into that category if you’re in work and pay tax through a Pay as You Earn (PAYE) scheme.
People who won’t get a P60 are those who are self-employed, or company directors who own or part-own the business they work for. Of course, if those people are also doing a second job for a separate employer, they can receive a P60 covering that work.
A P60 sets out how much you’ve earned from your employer. It will also set out how much tax and National Insurance you’ve paid over the financial year. The financial year starts on 6 April and runs to 5 April the following year.
If you have more than one employer, you’ll get a P60 from each of them.
How do you get a P60?
You shouldn’t have to do anything to get your P60. It should be generated automatically by your employer and sent to you sometime after the end of the financial year.
If you haven’t received your P60 by the end of May, though, chase your employer. In larger organisations, contact the Human Resources (HR) or payroll departments.
Some employers may make your P60 available to you online on your personal record. If that’s the case, you should just be able to download it from there. Others will send you a paper copy.
Why do you need a P60?
Your P60 is your annual record of the amount you’ve earned from your employer. It’s also your record of the amount you’ve paid in tax and National Insurance on those earnings.
But what is a P60 used for? There are a number of reasons you might need it:
- To complete a self assessment tax return — if you have income from sources other than your PAYE employment, you’ll need to complete a self-assessment tax return. HMRC may also ask you to do this, even if your PAYE job is your only income. You’ll need the information in your P60 to complete the form.
- To apply for a mortgage or other loan — your bank or building society may ask for your P60 as proof of your income.
- To apply for means-tested government payments, like tax credits — your P60 will be used to assess your eligibility.
- To apply for a tax rebate — if you think you’ve paid too much tax, you’ll need the figures in your P60.
- To respond to queries from HMRC — yes, HMRC may occasionally get in touch to check your tax position. And your life will be much easier if you have your P60s ready to answer any queries.
How do you use your P60 to get a tax refund?
The P60 tax refund example is often the one that’s of most interest! So what is a P60’s role in getting you a tax rebate?
Start by comparing the information it shows with what’s in your payslips for that financial year. If there’s any difference between the total tax deductions, something has gone wrong.
Remember, though, that the P60 year runs from 6 April to 5 April. If you’re paid at the end of each month, you need to look at your payslips from April to March.
You should also check your tax code. This sets out how much you can earn before you pay income tax. Any mistake with your tax code could mean you pay too much (or too little!) tax.
You can query the position with your company’s payroll or HR department. But if the tax has already been deducted, you’ll need to contact HMRC to request a rebate.
What should you check on your P60?
So the answer to “What is a P60?” is, “It’s really important!” And that means it’s also very important to ensure that it’s accurate.
Don’t just assume your employer will have got everything right. It’s your responsibility to check your tax information and correct any errors. Even if there’s been an honest mistake, you could find yourself facing a fine or other penalties from the tax man.
When you receive your P60, check it carefully. Here’s what to look for:
- Your personal details. Your P60 should have your full name, spelled correctly, and your National Insurance number. It will also have your employee payroll number. Make sure these are all absolutely correct. If they’re not, you could find yourself being mixed up with someone else.
- Your tax code. HMRC generates a tax code for you based on what it knows about your personal circumstances. Your tax code is used to work out how much tax you should be paying, so it’s very important that it’s right. Check it against any letter you’ve received from HMRC with your tax code. You can also check it online at gov.uk, or with the HMRC app.
- Your total pay, tax and National Insurance contributions. Check these against the information on your pay slips for the year to make sure they add up correctly.
- Other pay or deductions. Depending on your circumstances, your P60 may have other information that needs to be checked. This might include maternity, paternity or statutory sick pay, or Student Loan repayments deducted from your pay.
What should you do if your P60 is wrong?
If you find a mistake on your P60, don’t worry. It’s often quite easy for it to be put right.
Your first port of call is your employer, usually the payroll or HR department. Explain where you think the error has been made, and how you’ve identified it. Often, they can simply reissue an amended P60.
If the wrong amount of tax has already been deducted, you’ll need to contact HMRC. You can do that directly – your query will almost certainly be something they’ve dealt with before, and they’re usually very helpful.
Alternatively, you could ask your accountant or a tax adviser to liaise with HMRC on your behalf. You will, however, need to pay a fee for this.
Whatever approach you choose, act as quickly as possible. And if you think you haven’t paid enough tax, don’t be tempted to treat it as a windfall! HMRC will almost certainly notice the error, and you may have to pay a penalty on top of your tax bill.
Is a P60 the same as a payslip?
You can use your payslips to check the information in your P60, but they’re not the same thing.
Your pay slips will record your pay, tax and National Insurance contribution each time you’re paid. Often, that means they’re generated monthly, but some people get payslips weekly or at other intervals.
A P60, on the other hand, covers information on pay and deductions for the whole year. It’s always produced after the end of the financial year and covers the preceding 12 months.
Is a P60 the same as a P45?
P60s and P45s are two of the most commonly issued “P-forms” (the “P” stands for PAYE). And while they contain some of the same information, they’re not the same.
A P45 is issued when you leave a job. It will set out the total salary you’ve been paid by that employer in that financial year. It will also include information on the income tax and National Insurance contributions you’ve paid.
It will cover the period from 6 April to the date you left that employment. (That’s different from your P60, which will cover the whole of the financial year.) And it’s helpful to your new employer in working out how much tax should be deducted from your pay.
What should you do if you’ve lost your P60?
If you’ve lost your P60, your employer will usually be able to issue you with another one. If you have a self-service employee portal, you may be able to request it through that, or even download it again yourself. In smaller organisations, contact whoever is responsible for payroll.
If you need them, your employer should also be able to supply copies of any P60s they issued to you in previous years.
Recap: what is a P60?
What is a P60? It’s simply an annual record from your employer of how much they’ve paid you. And it records how much tax and National Insurance contributions they’ve deducted from your pay.
Each P60 covers the period from 6 April one year to 5 April the next. And if you have jobs with different employers, you’ll get a P60 for each of them.
Just make sure you check the information on it is correct! It could be your key to a tax refund or the evidence you need for your mortgage or tax credits. And if there’s a mistake, it’s always in your interest to get it corrected as quickly as possible.