When do I need to give my employees their P60 and why is it important?

As an employer, it's important to ensure that you're providing your employees with all the necessary documentation they need, including their P60 form. A P60 is a document that summarises an employee's earnings and deductions for a given tax year. 

Here's what you need to know about P60s, why they're important and when you need to give them to your employees.

What is a P60?

A P60 is a form that employers in the UK are required to provide to their employees at the end of each tax year. It is an official document that summarises total pay, gross pay, income tax deducted, and any National Insurance (NI) contributions for the tax year.

Why is a P60 important?

There are a few reasons why a P60 is important for employees.

Firstly, it's a record of their income tax paid for that tax year. This tax information is important if an employee needs it for mortgage applications, a loan or any other financial product that requires official proof of income, as well as other important documents and financial matters. It's also important if an employee needs to claim back overpaid tax, including tax refunds and tax credits.

Secondly, a P60 can help an employee to complete tax returns if they need to. If an employee has other income to report through self assessment, the information on the P60 can help them complete self assessment tax returns accurately and efficiently, while self employed contractors would not get a P60 for freelance work.

Employees with more than one job receive a separate P60 from each current employer, while a new employer only issues one for the period they employed that person during the tax year.

Finally, a P60 can be used to resolve any issues with tax or NI contributions that may arise. For example, it helps check how much tax was deducted by comparing earnings and tax, tax and national insurance, and whether the correct tax code was used, with the final tax code for the year shown on the form.

When should I be issuing a P60 to my employees?

Employers must provide all their employees who are still employed on 5 April with a P60, including part time employees, and this is legally required under HMRC regulations at the end of each tax year, which runs from 6 April to 5 April the following year.

This means employees should receive their P60 by 31 May each year; non-compliance can trigger a £300 fine from HMRC if it is late, plus an additional £60 for each day the form remains outstanding.

A P60 can be issued as a paper document or electronically, and many employers now make it available through an online payroll portal.

A P60 is only for employees still employed on 5 April, while anyone who leaves before then should receive a P45 showing earnings and tax up to their leaving date.

If you're an employer, it's important to keep accurate records in your payroll software for gross pay, tax deductions, and statutory payments such as sick pay and paternity pay throughout the year, and to keep P60 records for at least three years so you can provide an accurate form at year end.

If you're an employee, and do not get a p60 by the deadline, check your portal first, then contact the payroll department or HR department to request it.

So, for businesses and employees staff alike, the P60 is a key document as it contains information about salary payments and the tax contributions employees have made to HMRC over the year. HMRC cannot provide a duplicate P60, but your personal tax account, including the HMRC Personal Tax Account, can help you view tax records and tax information, and contacting HMRC directly may help with an income summary.

Your accounts department will be able to produce these, but there is also a basic PAYE tool on the gov.uk website.

Disclaimer: This is not legal, accounting, or tax advice - it's simply a guide. If you need help, check with your accountant or contact HMRC directly.