What is a P60 - End of Year Certification Explained

The P60 is an important end-of-year certificate issued to employees in the United Kingdom. It summarises your total earnings and the amount of tax and National Insurance contributions deducted throughout the tax year, which typically runs from April 6th to April 5th of the following year. P60 form serves as concrete proof of your income and taxes paid, making it vital for various financial and administrative purposes.

Let's understand what a P60 is, why it matters, and how to make the most of it for your financial wellbeing.

A P60 is an end of year certificate issued annually to employees by their employers, typically by the 31st of May. It indicates the total income earned and the taxes paid during the tax year, typically from April 6th to April 5th of the following year. It also indicates the amount an employee has paid in PAYE income tax and National Insurance contributions.

The P60 form is crucial for individuals as it serves as proof of income and tax paid, which may be required for various purposes such as applying for loans, mortgages, or tax rebates, as well as for self-assessment tax returns.

Importance of P60

for Employees:

For employees, it provides a comprehensive overview of their earnings and tax contributions for the year. This information is invaluable when it comes to filing tax returns, applying for loans or mortgages, and planning personal finances. Additionally, it ensures that employees are being taxed correctly and can identify any discrepancies in their pay and deductions.

for Employers:

Employers also benefit from a thorough understanding of the P60. It is a legal requirement for employers to issue P60s to all employees who were on the payroll at the end of the tax year. Failure to do so can result in penalties from HMRC. By understanding the importance of the P60, employers can ensure compliance with tax regulations and maintain accurate payroll records.

Apart from providing a record of important information (such as the amount of tax you've paid), the form is also a proof of income, and you may be required to provide the P60 in certain cases.

These include:

1. To Apply for a Loan or Mortgage

A mortgage broker or bank will want to see consistent income after tax to assess what level of risk they are willing to accept by providing you with a mortgage and how much you can afford to repay each month.

If you're self-employed and need to apply for a mortgage, check out our comprehensive guide on self-employed mortgages and how to get one.

2. To Claim Back Overpaid Tax

If you've overpaid tax during the tax year, perhaps due to being on the wrong tax code or having multiple employments, your P60 helps HMRC identify the extent of the overpayment. With P60, you can show your income proof which can help you claim back any overpaid Income Tax or National Insurance.

3. To Apply for Tax Credits

You'll need to show your income if you're applying for anything means-tested, such as tax credits.

Refer to the UK government’s resource on how to claim tax credits for further information.

4. To Complete Self Assessment Tax Return

If you're self-employed or have additional income outside of employment, your P60 provides essential information for completing your self-assessment tax return. You can also claim any tax rebates due, through this process.

5. Tax Relief on Pension Contributions

Your P60 also reflects any pension contributions made during the tax year. You may be eligible for tax relief on these contributions, which can be claimed through your self-assessment tax return or by contacting HMRC directly.

If you are an employee, your employer is responsible for providing you with a P60 by the end of the tax year. Your employer may send it electronically or as a hard copy. You can also get your P60 information online by creating an HMRC personal tax account.  

If you have switched your job during the tax year, your current employer will provide you with the P60 form at the end of the year. In that case, your previous employer will issue a P45 form having details of your earnings and tax status until you have left the previous company.

When Do I Get a P60?

As an employee, you typically receive a P60 at the end of the tax year, which runs from April 6th to April 5th of the following year. Employers are required to issue P60 forms to their employees by May 31st following the end of the tax year.

Have a look at the below sample P60 form. It is a blank P60 form which required to be filled by employers:

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Information in P60

Your P60 form contains important information regarding your income and tax deductions for the tax year. Here's what you'll typically find on your P60:

1. Employee Details: This includes your name, address, and your National Insurance number.
2. Employer Details: Information about your employer, including their name and address.
3. Tax Year: The period covered by the P60, usually from April 6th of the previous year to April 5th of the current year.
4. Total Earnings: The total amount you earned from your employment during the tax year.
5. Tax Paid: The total amount of income tax deducted from your earnings by your employer throughout the tax year.
6. National Insurance Contributions: Information about the National Insurance contributions you made during the tax year.
7. Tax Code: Your tax code for the tax year, which determines how much tax you should pay.
8. Employment Details: Details about your employment status, such as whether you're a full-time or part-time employee.
9. Other Deductions: Any other deductions made from your earnings, such as pension contributions or student loan repayments.
10. Pension Contributions: If applicable, information about any pension contributions made during the tax year.
11. Unique Reference Number: A unique identifier for your P60 form.
12. Date Issued: The date when the P60 was issued to you by your employer.

What Should I Check on My P60?

Your P60 is a key document that summarizes your earnings and the tax you've paid over the tax year. It's essential to review it carefully to ensure all the information is correct. Here’s what you should check on your P60:

1. Check Personal Information: The basic personal information like your name, address, employer details, National insurance number, payroll number are correct. This helps HRMC to recognise your unique identity.

2. Tax Code: Confirm that your tax code is correct. This code affects how much tax you pay, so it's crucial it's accurate. If it’s wrong, you may be overpaying or underpaying tax.

3. Earnings Information

• Total Pay: Look at the total amount of money you earned over the tax year. This is your gross pay before any deductions.
• Taxable Pay: Ensure the taxable pay figure is correct. This is your pay after any tax-free allowances have been applied.

4. Total Tax Paid: Check the amount of tax you’ve paid over the year. This should align with what you expect based on your earnings and tax code.

5. Other Payments and Benefits

• Statutory Payments: Ensure any statutory payments like sick pay, maternity pay, or paternity pay are listed correctly.
• Benefits: Check for any other benefits received from your employer that should be recorded.

If you find any mistake on your P60, it's important to take steps to correct it promptly. Here’s how you can do that:

Contact Your Employer

Reach out to your employer’s payroll or HR department as soon as possible. Explain the error and provide any supporting documents. Ask your employer to issue a corrected P60. Employers are responsible for issuing and correcting P60s.

Contact HMRC

Get in touch with HMRC directly. Explain the situation and provide any proof of the error. HMRC can advise on what to do next and may be able to assist in correcting the information on P60. If you can't contact HMRC directly to handle this yourself, we advice to hire a personal tax accountant to handle and correct your P60 on your behalf.

P60 is different from a P45. While both are important documents related to employment and tax, they serve different purposes and are issued at different times.

P60:

• Issued annually at the end of the tax year (usually by May 31st).
• Provides a summary of your total earnings, tax deductions, and National Insurance contributions for the entire tax year.
• Typically used for various purposes such as applying for loans, mortgages, or tax rebates, as well as for completing self-assessment tax returns.
• Given to you by your employer if you're still employed by them at the end of the tax year.

P45:

• Issued when you leave a job.
• Provides details about your income, tax paid, and National Insurance contributions up to the date of leaving.
• Consists of four parts: Part 1A, Part 2, Part 3, and Part 1B.
• Part 1A is given to HMRC by your employer.
• Part 1B is kept by your employer for their records.
• Part 2 and Part 3 are handed to you to give to your new employer or to keep for your records.
• Used by your new employer to ensure that they apply the correct tax code to your earnings.
• Provides important information for your next employer and for tax purposes when switching jobs.

4 Reasons You Won't Have a P60

1. Being Self Employed

As a self-employed individual, you aren't part of a PAYE scheme, so you won't obtain the P60 form.

You're required to file your Self Assessment tax return annually to show your income though.

2. Employed vs Self Employed

You'll get a P60 from your employer but are also required to file your Self Assessment tax return.

That's because your P60 only indicates your income and deductions from your job and not the income you obtain as a self-employed person.

3. Sole Traders

As a sole trader, you aren't drawing a salary, so you're not required to issue yourself a P60.

However, you'll need to issue the form if you have employees, or are drawing a salary from other employers.

4. Multiple Jobs

If you held jobs with different companies between April 5th then you'll need a P60 form from each company. You should ensure that a previous employer has issued your P60.

P60 Form with Your Own Limited Company

If you're drawing a salary from your limited company, you'll need to issue yourself a P60 form.

And if you have employees, you'll need to generate P60 forms for your staff. These forms should be handed to them by 31st May.

If you are working as a contractor, then you should complete a Self-Assessment to calculate how much you've earned.

If you need help with your Self-Assessment, we can help you with your filing which will need to be done by January 31st 2025.

P60 with an Umbrella Company

If you're a contractor working through an umbrella company, you'll receive a P60 as the umbrella company is considered an employer.

Frequently Asked Questions on P60

I've lost my P60? What do I do now?

Ask your employer for a replacement P60. If your employer doesn't provide a replacement P60, you have two options:

• Use your personal tax account to view or print the P60 information
• Contact HMRC directly to request the details from your P60

Do I get a P60 if I am self-employed?

As a self-employed individual, you don't get a P60 because you're not an employee of a company. If you're self-employed as a sole trader, you don't need a P60 since you don't draw a salary. However, for those operating a limited company and drawing a salary, issuing themselves a P60 is a requirement.

How Long Should I Keep My P60?

It's recommended to keep your P60 for at least 22 months from the end of the tax year to which it relates. This is because HMRC may request to see your P60 as part of a tax investigation or audit.

Do I Get a P60 When I’m Retired?

Yes, you will still receive a P60 in retirement if you have any taxable income. If you receive a state or private pension, your pension provider will issue a P60 each year, documenting your taxable income and the tax deducted.