HMRC has assigned yet another mysterious name to one of its forms. The form we are talking about is the P60 form and you are now going to understand its relevance.
What is a P60 form?
The P60 form is an outline that contains all your salary and deduction details for a single tax year which begins from 6th April and ends on the 5th April of the next year. The P60 carries the following data:
- The entire salary from the previous and current employments that were recorded for the prior tax year.
- The entire tax deductions cut from PAYE.
- Any NIC (Natural Instance Contributions) details.
- Presence of student loans or any statutory payment like paternity or maternity payment.
Who has to file one?
If your company has generated your payroll on 5th April, then you may receive salary by the 31st of May the same year. In case, you get your salary from your own limited company, then it is necessary for you to generate a P60 form. Mostly, this task falls under the duties of an accountant.
Why is there a need for a P60 form?
The form is used as an efficient documentation for your payment of taxes. Other than that, it can be used for the following reasons.
- When one has to file for a mortgage or a loan.
- Filling a return for Self Assessment.
- Apply to reclaim Natural Insurance or any Income Tax which may have been overpaid.
- To apply for tax credits.
What to do if I have two or more jobs?
For those professionals who have received salary from multiple companies on 5th April of the same year, separate P60 forms would be issued for each one of them from their respective employers.
How do I approach this as an employer?
Irrespective of your role as the owner of a limited company or functioning as a sole trader, you must file P60 forms for any employee that has been getting yearly salary from your company on the 5th April. Whether, you give them a digital form or a printed one, it is absolutely your discretion but do issue the forms by the 31st May.
What is the right approach if I operating via an umbrella company?
If you are a contractor who works with an umbrella company, then you are also compliant to get a P60 from your umbrella company.
What if I am a sole trader?
For those professionals who happen to work as sole traders and do not draw salaries, there is no need for you to issue a P60 for yourself. However, in case you are drawing salaries from any other employers, then you must receive a P60 form.