A P60 is a form used by HMRC. A P60 is issued at the end of each tax year. A P60 contains exact information about how much you have earned PAYE (Paye As You Earn) and NIC's (National Insurance Contributions) you have paid during the specified tax year. It is your responsability to check your P60 and claim back any overpaid tax or report underpaid tax.
30 second introduction to P60
How the P60 works
A P60 (End of Year Certificate) is an annual statement issued to taxpayers at the end of each tax year that the employee works for an employer. You should never destroy your P60 as it is a vital part of the proof that tax has been paid.
A P60 is actually one part of a three part tax form call a P14 (End of Year Summary). the P14 comes in three parts
- P14 Part 1: Part one of the p14 is for HMRC and is sent to the Contributions Office.
- P14 Part 2: Pat two of the P14 is retained by the tax office where your employers PAYE scheme is registered
- P14 Part 3: Part three is the P60 that we all know and love!
- A P60 is an 'End of Year Certificate'.
- If you are working as a PAYE employee (normal worker) on 5th April each year your employer must give you a P60.
- A P60 defines exactly what HMRC know and belive your should have paid in tax and National Insurance.
- If your P60 is incorrect, it is up to you to rectify the error.
- You will typically be asked to provide a copy of your P60 when applying for a mortgage, property rental or other financial service.
- You should never destroy your P60! Your P60 is proof that you have paid your tax. HMRC have superb technology these days but they frequently make mistakes and will bill you unwittingly when they make a mistake. HMRC tax systems are automated and will create and issue letters without human interaction. Errors can quickly amplify into fines so keep your P60 as proof.
- If you are an employer, you must provide a form P60 to each employee who is working for you at the end of the tax year. You should also have completed a P11.
P60 in detail
Well, that the P60 explained in 30 seconds, well, maybe a little longer. If you want to know more about P60's, your responsability as an employee / employer and who to contact for a tax rebate if you think you have paid too much tax read our guide: P60 Explained in detail
Next: P60 Checklist 2016
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