Every business owner that employs staff needs to be familiar with several key tax forms, one of them being the P60. This article gives business owners a complete guide to P60s, including what they are, who needs to receive one and the information it should provide.
As always, if you require further information you can contact our helpful team of employment lawyers who will be only too happy to assist you.
A P60 is an official form provided to employees. It sets out the amount a particular employee earned over the course of a tax year, for example, 6th April 2021 to 5th April 2022.
Furthermore, it will state any deductions made from an employee’s pay, including tax and National Insurance (NI) contributions.
Employees must be provided with their P60 by 31st May following the end of a tax year. It can be issued in paper or electronic format.
If an employee has left your employment during the tax year and they have been issued a P45 you do not need to provide them with a P60.
A P60 shows the following information:
Employees may need to provide a P60 for several reasons, including:
For the reasons listed above, employees must file their P60 in a safe place. If an employee loses their P60 you will need to provide them with a copy as the HMRC cannot.
Many small business owners are directors of a limited liability company. If this applies to you and you pay yourself a salary you will need to issue yourself with a P60.
If you do not pay yourself a salary through PAYE you will not need to issue yourself a P60. If you employ people, however, they will need to be issued with a P60 by 31st May.
It is imperative that you issue your employees with their P60s on time as HMRC can charge an initial penalty of £300 for late issuing and an additional £60 per day for every day that it is late. If you promptly rectify the late issuing of your P60s and explain that a genuine error occurred it is unlikely that HMRC will charge you a penalty.
If you have made a mistake and need to issue a new P60 the new form must be labelled ‘replacement’. Alternatively, you can issue your employee a letter confirming any changes made to the original P60.
Issuing P60s is just one of the many accounting responsibilities business owners have. If you require any support regarding HMRC compliance, please contact to speak with one of our expert employment lawyers. To book a free 15 minute consultation, just click ‘Get started’ below.
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