What is a P60?

A P60 is a document that employers are legally required to provide to their employees at the end of each tax year. This form summarises the total amount of tax and National Insurance contributions deducted from an employee’s salary over the year. Employees often need this document for various financial purposes, such as applying for a mortgage, securing a loan or claiming tax rebates. This section will detail the importance of a P60 and provide access to a template to help employers fulfil their obligations accurately and efficiently.

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When do P60s come out

A P60 is a year-end certificate specific to the United Kingdom, issued by employers to all their employees. This form

• Summarises the employee‘s total earnings together with the total amount of tax and National Insurance contributions deducted from their pay
• Is proof of income and tax paid, the P60 and is essential for employees who need to verify their financial status for various purposes such as applying for credit, securing a mortgage or providing proof of earnings for rental agreements

Individuals should keep their P60s safely stored, whether in physical or electronic form, to facilitate future financial transactions or meet administrative requirements. The P60 is often required when completing self-assessment tax returns, making it an essential document for personal financial management.

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Tips for completing P60 forms

Knowing what a P60 form looks like might be useful for employers who are not yet familiar with this certificate. Although the look and feel of the document may vary, its content should remain the same.

The P60 form on gov.uk gives employers access to a PDF version of the latest P60. This can be used as a template to fill in for their employees.

An alternative to using the gov.uk form, is to create your own form. However, it is essential to ensure you include the mandatory information listed below.

• The employee’s full name
• The employee‘s National Insurance number
• The unique employee payroll number
• The employee’s tax code
• The gross pay the employee received during the tax year
• The tax deducted from the gross pay
• The employee’s National Insurance contributions
• Any student loan deduction during their current employment
• Details of statutory payments if applicable, these may include sick pay, maternity pay and more
• The PAYE reference for your business
• The name of the organisation and its legal address

Some employees’ benefits should be accounted for when it comes to tax deduction. Learn about financial benefits for employees, including paid time off, retirement and supplemental insurance.

Employees should be provided a P60 by all employers they have worked for during the tax year.

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P60 deadlines

The P60 is a type of income and tax certificate, and its deadline aligns with the UK fiscal year. This section outlines essential dates for the P60 form and explains the consequences of missing the deadline.

P60 key dates

The P60 form is aligned with the UK tax year, which runs from 6 April to the following 5 April. Since the P60 is often issued by payroll software, the final deadline for issuing it is 31 May following the end of the tax year. This is the final deadline for employers to distribute the form to their employees. Failure to provide P60 forms by this deadline constitutes non-compliance with HM Revenue and Customs regulations, potentially leading to penalties for employers.

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What happens if you miss the deadline?

Employers who miss the 31 May deadline for issuing the P60 may face enforcement actions from HMRC. The consequences vary based on the situation and the employer’s responsiveness, ranging from a warning letter to a substantial financial penalty. The seriousness of the offence is analysed on a case-by-case basis.

Organisations who do not meet the deadline may face a starting fine of £300 for late release. This can be followed by a £60 fee per day until the P60 is issued to the employee.

Employers should plan ahead for the delivery of the P60 to ensure they meet the established deadline. This period is busy for financial teams closing accounts and completing year-end operations, while payroll teams are also issuing regular payslips. Using high-quality accounting software can simplify the process, ensuring timely delivery and accuracy of the documents.

When to start completing P60 forms for employees

A P60 is usually generated by a company’s payroll software once the final payroll period of the tax year has been processed. For employers who do not use payroll software, this task can be managed by an accountant. Alternatively, employers can download the latest P60 form from the government website and complete it manually, a common approach for small businesses with fewer than ten employees.

Business directors receiving a salary must also issue a P60 for themselves. Both employers and employees should retain a copy of the P60 for their records. Employers use it to demonstrate compliance with HMRC regulations, while employees need it for their personal tax records. It is recommended that P60 documents are kept for at least six years.

P60s can be issued in paper form or as an electronic document. For electronic versions, it is advisable to ensure the document is password protected to maintain confidentiality. If you are in doubt, check how the Federation of Small Businesses can help.

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At the end of each tax year, employers must deliver a P60 form to every employee, as required by HMRC. Understanding the regulations behind issuing P60s, knowing what to include in the form and meeting the deadlines is all part of compliance with HM Revenue and Customs. Employers can automate this process by integrating a payroll software to simplify the process and cut out human errors. Check automated workflows and how they can help in HR for more information.