P60 form deadline is approaching – what you need to know
Employers are required to issue a P60 form by May 31 – but what is the form actually for, and what happens if your employer misses the deadline?
If you’ve been employed for some time, you’ll have heard of a P60, but understanding what it is and why it matters is vital.
If you’re an employer, it’s key to stay on top of the deadline to avoid a fine from HMRC.
A P60 shows the amount of tax you’ve paid for the tax year. Tax years run from April 6 to April 5.
Employers are legally required to give you a P60 if you were working for them on April 5, and they have to do so either electronically or on paper by May 31.
The end of the month is just around the corner, so employees should expect their forms soon, and employers should be getting everything squared away.
What is in a P60 form?
A P60 shows how much tax you’ve paid, but it’s also necessary if you want to claim back overpaid tax or apply for tax credits. It’s also a way to prove your income should you need to take out a loan or a mortgage.
If the information on the form does not look accurate, you should inform your employer as soon as possible. You could be overpaying or even underpaying tax, and the longer that goes by unnoticed, the trickier it may be to rectify down the line.
Double-check your name, address, and National Insurance number. It’s also important to make sure your earnings match what’s on your payslip, and that any statutory payments or student loan deductions are noted on the form.
If you didn’t get a P60 from your employer you can request it using your personal tax account or the HMRC app, or call up HMRC and ask them to relay the information that would be on your form.
How is it different to a P45 form?
You receive P45 forms when you stop working for an employer. The form will show how much tax you’ve paid so far into the tax year, instead of what tax you’re paying for the year as a whole like a P60 would.
What are my responsibilities as an employer?
Employers are responsible for providing a P60 to all their employees, whether they are full time or part time, permanently contracted or temporary.
These have to be issued by May 31. Staying on top of payroll, generating and distributing P60s can be tricky, but a failure to do so could lead to a fine from HMRC.
HMRC can issue a £300 fine if P60s are issued late, and adds £60 per day until these get sent out. So even a 5 day delay could cost you over £500.
This makes it even more worthwhile to look into payroll software, such as ANNA Money. ANNA Payroll automatically creates P60s as well as P45s and payslips, and stores them away digitally. You may also have heard of Sage or Xero, two other payroll software applications.
If you’re running your own business, it’s also worth thinking about the best business account for you. Picking the right one is key, as only some accounts allow you to link them with payroll software, so make sure you do your research before signing up.