Can you put money in your bank account through the Post Office? Find out everything you need to know here in this handy guide.
If you have an employer and pay tax, you’ll receive a P60 each year. But what is a P60 form, and why is it important?
In this handy guide, we’ll cover the answers to those questions and more. We’ll look at the information you can expect to find on a P60, what to do if you lose it and the difference between this and other similar tax forms.
If you’re looking into the P60, this could mean you’re looking for cost-effective ways to manage your finances. If so, you can consider getting yourself a Wise account. This gives you a low-cost way to get paid in multiple currencies, making it ideal for freelancers, entrepreneurs and international workers.
But more on that later. First, let’s cover the basics you need to know about the P60.
In a nutshell, the P60 is a summary of your earnings and the tax you’ve paid in the latest tax year. It’s an End of Year Certificate. For reference, the tax year runs from 6th April to 5th April the following year.
P60s are issued by your employer after the tax year ends on 5th April, so you should receive yours by 31st May at the very latest. You’ll either receive yours electronically or in paper form.
The P60 End of Year Certificate is usually just one page, and offers a snapshot of your employment, salary, tax and National Insurance contributions for the tax year just gone.
Here’s what you can expect to find on your P60 End of Year Certificate:
- The tax year the P60 is referring to
- Your tax code
- Your personal details, including National Insurance number
- Details of your employer, including their Employer PAYE reference number
- Total pay and income details for the year
- Total tax deducted for the year
- Details of National Insurance contributions for the year
- Student Loan repayment deductions for the year.
You’ll receive a P60 only if you are employed or retired. You won’t usually receive one if you’re self-employed, as the P60 is issued by your employer. HMRC generates the information on the form, and your employer issues it to you.
If you’re retired, you’ll get a P60 every year from your pension provider. This will show the tax deducted from your pension payments before you receive them.
Your P60 form has a number of very important uses. Firstly, it’ll be essential if you ever need to fill in a tax return. If you become self-employed (or take on any self-employed work alongside your regular job), your P60 will give you details of your income and tax to use on your Self Assessment form.
You may also need to provide a copy of your P60 as proof of salary in certain situations. For example, when applying for a mortgage or other financial service.
One thing you don’t need a P60 for is to give to your employer when you start a new job. Your P60 is for your records only. The form you need in this instance is the P45 - this is what you receive when you leave a job for any reason.
The P60 provides a summary of earnings and tax for a complete tax year, and every worker receives one. The P45 provides similar information on salary and tax, but can cover just a part of the tax year - up until the point you left your job.
The P45 comes in a few different parts, one of which you give to your new employer so that they can enter your correct tax code into their payroll system.
Unlike a P45, your P60 End of Year Certificate can be replaced if you lose it. All you need to do is ask your employer to provide a replacement copy. So, no need to panic if you can’t find your P60 when you need it.
If you’re doing some homework on the P60, this could be because you’re considering striking out on your own as a freelancer. Alternatively, you might just be looking to change jobs. Whichever is the case, you’ll need to find the most cost-effective way to get paid.
Sign up for free and get your multi-currency account with Wise and you can receive money from all over the world for zero fees. This is super handy to have if you’re considering taking on international work, where getting paid through banks can be time-consuming and expensive.
And there you have it - your at-a-glance guide to the P60 End of Year Certificate.
You should now know what information your P60 will contain, what to use it for and what to do if you lose your P60. You’re completely covered.
Sources used for this article:
All information from: Which.co.uk - what is a P60
Sources checked on 11 March 2021
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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