Supplying employees with P60s is an annual job that shouldn’t take up too much of your time. But what happens if you miss the P60 deadline, and how can you claim a P60 tax refund?
Read our quick guide to P60s to make sure you and your employees are sorted.
Your employee’s P60 summarises their total pay and deductions for the tax year (6 April to 5 April the following year).
It’s an official document which clearly states pay (from their current and any previous jobs during the tax year), total tax deducted through PAYE, National Insurance contributions, and any student loan or statutory payments like maternity pay.
They’ll need to receive it every year by 31 May, and it can be paper or electronic.
All employees on your payroll who were working for you on the last day of the tax year (5 April) will need a P60.
If you’re using payroll software which automatically produces P60s, this’ll be much quicker.
If not, you can order copies from HMRC, but bear in mind these will take at least seven working days to arrive.
Another option is to use HMRC’s Basic PAYE tools, which provide free payroll software for businesses with fewer than 10 employees.
If you’re self-employed and not part of a PAYE scheme, you won’t receive a P60 and you won’t need to include it in your tax return.
However, if you receive a P60 from an employer but still need to file a Self Assessment for other work, then you can include it.
For example, if you run a clothing business from home but also work in a local coffee shop, you’ll need to complete a Self Assessment for your clothing business. You’ll also receive a P60 from the coffee shop as a record of your income and tax deductions from that job.
Read our guide to second job tax for a more detailed overview.
It’s important to note that if you’re employed by several companies during the same tax year, you should receive a separate P60 from all of them.
All P60s will have a section for ‘total tax deducted’. This is the amount of tax taken by the employer during the tax year the P60 is being issued for.
For example, if an employee earns £34,000 in a year from an employer and pays £4,750 in tax, their ‘total tax deducted’ figure for that tax year would be £4,750.
A P60 will include the following information about you or your employees:
It’s good practice to check the figures on P60s because if they’re wrong, you or your employees could be paying too much tax.
If this is the case, a P60 can be used to claim a tax refund. Here are some of the most common reasons for overpaying tax:
Employees can claim a refund from HMRC after the end of the tax year in which they overpaid. They’ll need to provide all their details, including National Insurance number, employer reference number, P45, and P60.
When claiming a refund, taxpayers will need to outline the following details to HMRC:
Taxpayers have four years from the end of the tax year in which they overpaid to claim a refund. For example, anyone requesting a refund for overpayment in the 2021/22 tax year will have until 5 April 2026 to submit their claim.
When you hire a new member of staff, it’s important that you provide HMRC with enough details about their salary. If you don’t, the employee could be put on an emergency tax code and end up overpaying tax.
For example, if the employee is given a ‘BR’ tax code, they won’t receive the tax-free personal allowance of £12,570. As a result, they’ll end up paying a basic tax rate of 20 per cent on all their earnings and overpaying their annual tax bill by more than £2,500.
When this happens, they’ll need to get in touch with HMRC to claim back the tax they’ve overpaid.
First thing's first, if you’ve missed the P60 deadline, make sure you give your employees their P60s as soon as possible. The longer the delay, the more likely you are to get a fine.
HMRC do have the right to charge initial penalties of around £300 for late issuing, plus around £60 every day after that, until you issue the P60.
However, this depends on reporting and enforcement. If it’s a genuine error and you take steps to issue the P60 as soon as possible, you’re less likely to get a fine.
Made a mistake? If you need to issue a new P60, HMRC says you should clearly label it 'replacement', or give your employee a letter confirming the change.
P60s are usually easy to sort out, once you have the right tools and guidance. Bookmark these HMRC pages to get you started:
Do you have any unanswered questions about P60s? Let us know in the comments below.
This article is intended as a guide. You should speak to a professional accountant or financial advisor if you’re not sure about anything.
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