If you’ve ever had a job then you will have received a P60, and if you’ve ever changed jobs youll also have received a P45. Here, Business Advice expert Rob Drury explains the difference between P45 and P60 forms, and why both are important for small businesses.
Every year in the UK, employers have a responsibility to give every employee a P60 on 5 April, as a statement of their income and an account of deductions made during the previous tax year.
The job of the P60 is to summarise the tax and national insurance paid from an employee’s earnings. It acts as proof of payment should the employee everhave a tax query, is required to fill in a tax return, or wants to make certain tax claims, such as for tax credits.
When you break it down, the P60 form covers the basics of:
Who the employee is Including their name and address, national insurance number, and employee number
Who their employer (you) are Including your business’s name, address and PAYE reference
How much the employee was paid during the course of the year Covering both their current employment with you and any others they may have had during the year, as well as any form of pay such as salary, sick pay or bonuses
How much tax the employee paid during the course of the year Again, across all the jobs they had
What national insurance contributions the employee paid during the year Again, as a total across all forms of employment
Any student loan deductions made If the employee has been paying back the government’s student loan from their time studying
Former footballer and cinema manager Robert Drury has been a digital professional since 2000, specialising in project management, client services, and product management. He supported global brands such as Kraft Foods, Peugeot Citroen, and Lloyds Banking Group with their online presence before moving into startups. He was a founding team member at Ormsby Street, a small business financial information tool, before moving to Qudini to oversee the development of that firm's customer experience software product.
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