What is a P60 in the UK?

What is a P60 in the UK?

A P60 in the UK is a form that is used to show how much your employer has paid you, as well as the tax and National Insurance payments that you have made over the last tax year. It also includes your tax reference number, which you will need if you have to talk to HMRC about your tax contributions.

The P60 is put together by the employer after the tax year has ended and it will then be given to you – in either paper or digital format.

The Importance of Keeping Your P60

You may already keep your regular payslips, but it’s just as important for you to keep your P60 each year, too. The general recommendation is to keep at least four years of P60s, which can provide evidence of both your earnings and your tax status.

You may need your P60 if you are applying for a tax rebate, if you have a query about your tax payments, or if HMRC ask you to prove your tax status. You may also be asked for your P60 if you are applying for credit, such as a mortgage, or if you are looking to rent a property and need to provide proof of earnings.

How to Obtain Your P60

Your employer should issue your P60 as standard after the tax year has ended on April 5th. However, you may not get it straight away. Like any important documentation, a P60 takes time to prepare, and your employer has until May 31st to get it over to you.

If you do not receive your P60 by then, don’t be afraid to ask them for it.

Receiving a P60 from Multiple Employers

If you work for multiple employers, you will receive a separate P60 from each one at the end of the tax year. The P60 you receive from Employer A will only give details of income, tax and National Insurance payments from that particular employer: you will need a completely separate P60 for Employer B (and any further employers).

You should still chase up your P60 from every single employer if you haven’t received it by May. If you are required to fill out a Self Assessment tax return, you’ll need to fill out the details of each employer you have, and your individual P60s will help with this.

Digital vs. Paper P60s for Employees

In the past, all P60s were provided as physical copies. Now, though, employers can choose to give you either a physical or a digital copy – the important thing is that you receive it in one form or another.

If you have a preference for a particular format, there’s no harm in asking your employer if they can oblige. While some people prefer to file important documents in paper format, others prefer to secure them in the cloud so they can access them anytime, and from anywhere.

The Relevance of P60 for Sole Traders

We’ve answered the question, “what is a P60 form?” – and explained that it is provided to those who are employed by an employer. But what about those who operate as sole traders?

The simple answer is that sole traders do not need a P60. As they are only issued by a direct employer, you will not receive one. As a sole trader, any profits from your work are all yours: you are not a salaried employee. For this reason, no P60 is required. If, however, you decide to change your business status to a limited company, you’ll need to introduce a PAYE scheme and everything associated with it – including P60 provision.

If you are a sole trader and do need to provide proof of earnings, there are alternatives to the P60 that you can use. 72 hours after submitting your tax return to HMRC you will be able to download an SA302 document from the HMRC website. This will provide evidence of your earnings for the previous four years. Should it be needed, you can also download an overview of any tax year.

Whether you are a limited company that needs to issue P60s or a sole trader looking for assistance with bookkeeping or accounting, QAccounting is here to help. Find out more about how we work here.