P60 Form is one of the most common Tax Forms that explains how much you have earned and how much you have paid tax in National Insurance contribution or as Income Tax. The ordinary meaning of p60 is the End of Year Certificate that taxpayers receive at the end of a tax year.
Your employer or pension provider gives you p60, which HM Revenue and Customs generate. It is of great importance because it shows your tax records and national insurance contributions paid over the year. We will explain everything in this article that you need to know about a P60.
What is a P60 Form?
HMRC automatically generates the P60 form, and it contains your tax records and national insurance contributions paid at the end of the year. So you can get p60 once a year which doesn’t matter how much tax you pay or how you pay it. Here includes the following information on your p60 form:
- Self-assessment tax return
- Employer, bonuses, benefits, the hours you work, salary
- Pension provider, contributions, how regularly you pay into your pension, tax deductions
- The Department of Work, which shares any state benefits you’re paid.
The P60 form is proof of the tax you have paid for the previous year. You’ll usually be asked to give a copy of your P60 when applying for a contract, property rental or other economic services as a record of your salary.
Why Do You Need a P60?
Your P60 not only shows how much tax you have paid, but it also confirms how much you’ve earned in the previous year. P60 form can be used for many different things, including the following:
- Proof of income for a mortgage statement
- If there is a need to claim back overpaid tax from HMRC
- Claiming any interests, you’re entitled to
When Do You Get Your P60?
Once the tax year achieves on deadline(last date 5th April), HMRC will close off your earnings calculations to observe how much tax you should have paid throughout the financial year. Therefore, you should be assigned a P60 automatically every year, by no later than the 5th of April. This is because the tax year starts from 6th April and ends on the 5th of April next year.
If you are self-employed, you couldn’t get a P60 as an employer usually hands them out. However, if you necessitate one as proof of income, you can call HMRC to interrogate one. For instance, if you are self-employed, you will get a P60 on the 31st of May after the tax year ends. P60 is the best and most straightforward way to prove how much you have made and paid tax.
P60 For Self-Employed
Suppose you’re self-employed; you might not receive a P60 as an employer-issued form. If you don’t get a P60 and need evidence of your earnings for a mortgage application, for instance – you can use an SA302 to show proof of revenues from the last four years. You can download this form from HMRC, but you have to wait 72 hours after sending your tax return to do this.
Setting people to work through the PAYE system requires filling out yearly P60 forms for each of them. You can do that on paper or get p60 online through the HMRC website; the documents needed to be your employees’ property on the 31st of May.
Suppose you’re managing a Limited Company and paying yourself a salary; you should keep in mind that you’re officially employing yourself through the PAYE system. So it could be convenient if you had a P60 for yourself each year.
P60 Form Contains
The p60 form contains the following blanks that you should have to fill in according to your secrete pieces of information.
- National Insurance number
- Employee and employer details
- National Insurance category letter
- The amount you earn is taxed at different rates, depending on your NIC table letter, which will be detailed here.
- The total amount of student loan deductions made during the tax year varies depending on your salary.
- The amount of any statutory maternity, paternity, shared parental, and adoption pay.
- If you fill out a self-assessment tax return, the figures shown here should be entered for the relevant job. Therefore, you may get more than one P60 if you have more than one job.
What Should You Check on Your P60?
As you know, p60 forms are automatically generated by HMRC and sent to your employers so that errors may occur. So now it’s your responsibility to check your p60 form against your payslips and do cross-check.
- If you are working in a salary sacrificing scheme, you should check that your p60 form shows the changes in the amount.
- If you are doing more than one job, you should check that the p60 form shows your overall income.
- You should also check any personal tax allowances like a blind person’s allowance.
Use of P60 to Get a Tax Refund
As you know, P60 is the record of all the tax you’ve had deducted over a year, and it’ll probably be your first tip-off that you’re owed a discount in the first place. In addition, it’s got a lot of the essential information required to show HMRC that you’ve paid too much tax. After that, compare your P60 to your payslips. If there is no addition, you’ve got your first clue right in your hands.
If you want to get a replacement for P60, grab a replacement p60 from your work should not be a significant hassle. You should only have to talk to your employer and explain what you need. Suppose your interest stretches back over more than one year; this can be a solid boost to your tax refund.
P60 vs P45
If you are going to start a new job, you cannot use p60, so you have to use p45. You are unable to get p60 when you leave employment. Preferably, you get it from your current employer at the end of the UK tax year. A P45 only covers the tax you’ve paid in the tax year up to the point you left a job. On the other hand, a P60 covers the tax you’ve paid in the entire tax year.
P60 explains how much you have earned and how much you have paid tax in National Insurance contribution or income tax. There is a need to keep your P60 in a safe place for your records; otherwise, you may request a replacement by asking your employer if it does get lost. The HMRC website provides many resources for online p60, and you can also call it if you need guidance.