An employer’s duties in the United Kingdom include deducting tax and National Insurance contributions from their employees’ wages under the PAYE (Pay As You Earn) system, but also issuing employees with P60 and P45 forms. What are these documents? When should they be issued and what information do they contain?
Summary & key takeaways
- The P60 summarises the tax deducted from your earnings over the whole tax year.
- Employers must give a P60 to everyone employed on 5 April by 31 May at the latest.
- A P60 is used, among other things, to claim a tax refund or apply for credit.
- The P45 is issued when you leave a job and goes to your new employer.
- Without a P45, your new employer sets your tax code using a starter checklist.
P60 - what is it?
The P60 form contains information about the tax deducted from an employee’s earnings in a given tax year (the tax year in the UK runs from 6 April to 5 April of the following calendar year).
Who issues the P60?
The employer is responsible for issuing the P60. The document must be prepared for every employee who was employed by the company on 5 April.
When does an employee receive their P60?
An employee must receive their P60 form (in electronic or paper form) by 31 May. From the employee’s perspective, it is also important that if they worked in more than one place at the same time during a given tax year, they must receive a P60 from each employer.
What do you need a P60 for?
You need a P60 to show the tax deducted from your earnings in England, for example when you claim a refund of overpaid tax. The P60 form also allows you to prove your earnings when applying for tax credits or a loan.
What if you don’t have a P60?
If you lose your P60, you can ask your employer to issue the document again. If you don’t have a P60, you can also get the information that should be on the document by:
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using your personal tax account,
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contacting HMRC.
P45 - what is it?
The P45 form contains information about the amount of tax deducted from an employee’s pay in a given tax year up to the point it is issued. The document consists of 4 parts:
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part 1 is sent to HMRC by the employer,
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part 1A is for the employee,
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parts 2 and 3 are given to the employee, who then passes them on to their new employer or to the Jobcentre Plus.
Who issues the P45 and when?
The employer has a legal obligation to issue a P45 form when the employment ends.
What do you need a P45 for?
The P45 form gives a new employer the information needed to add the employee to the payroll and correctly calculate the amount of tax to deduct from their pay.
What if you don’t have a P45?
If you are unable to give a P45 form to your new employer, for example because:
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you are starting your first job or taking on a second job (without ending your employment at your current workplace),
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your previous employer did not issue a P45,
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you have lost your P45 form,
you will need to provide the information required to determine your tax code in another way, for example by completing a starter checklist.
The forms described above allow you to confirm your employment, earnings and the amount of tax paid.
If you have doubts about filing your taxes or would like to put your finances in the hands of specialists, we encourage you to contact our accountancy practice in London!
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