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P60 Tax Return Procedure and P60 Form Guide by iCalculator

In this P60 Guide we review the steps involved in the end of year return, the aim being to provide an understanding of the end of year payroll process and steps that occur to allow the creation of a P60 End of Year Certificate

P60 Tax Return Process Flow

At the end of each tax year every employer must send an employment summary to HMRC (Her Majesties Revenue and Customs).

The employment summary must include:

  1. The full name(s) of all employees employed at the end of the tax year. Employees who left the company before the end of the tax year are not included on this return as they will either be recorded on their new employers return or, if they have not taken a new job, employment details will be held by HMRC based on the P45 issued when the employee left the company.
  2. The amount earned during the tax year (Gross Salary)
  3. The amount deducted for National Insurance Contributions (NIC)
  4. The Amount deducted for Pay As You Earn (PAYE)

The employment summary is used by HMRC to record and audit the taxable income for each employee. HMRC can then review the various elements and identify whether:

  1. The PAYE and NIC contributions are correct and issue a standard tax code
  2. The employee has paid too much PAYE/NIC and issue a tax refund and/or adjust the tax code for the following tax year to reflect the overpayment.
  3. The Employee has not paid enough PAYE/NIC and send a letter requesting payment and/or adjust the employees tax code to recoup the difference during the next tax year.

For those employees who have straight forward income and deductions, HMRC will aim to provide most adjustments directly through the manipulation of the tax code. The aim being to provide a standard pay calculation for the employee and avoid any large over/under payments.

Next: 2019/20 Payslip and Payroll Software

Previous: 2019 P60 Employer Checklist

P60 2019: Guides and Tools

iCalculator's P60 Guides and P60 Calculators include detailed information and guidance to help you understand your P60, identify key parts of the P60, explain how your P60 is calculated and what information you need to know and understand about a P60 as an employee and employer. Our aim with the P60 guides is to provide insight into the correct completion of a P60, whether it be an audit as an employer to ensure your end of year certificates are calculating correctly or as an employee to check that you have paid the right amount of income tax and, if not, how to claim any overpaid tax back.