Everything you need to know about your P60

As the end of the tax year approaches, an important document could be coming to your letterbox or inbox: your P60.

Issued by employers to their staff, a P60 is like "a receipt given to you by HMRC", said Unbiased, showing everything you have earned and how much tax you have paid in the past tax year.

It is an "important document to keep around", said Xero, as it can be used to claim back overpaid tax or to apply for a mortgage or loan.

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Employers must issue a P60 to employees for the previous tax year by the end of May.

What is a P60?

The document is an "end-of-tax-year statement", said GoSimpleTax, that shows the tax and national insurance contributions paid in the previous tax year.

It may also list any statutory sick pay or maternity pay received, or student loan repayments.

The document includes details such as your national insurance number and tax code, which tells authorities "exactly what level of tax you should be paying", added Unbiased.

You should keep a P60 for at least four years, said TaxAssist Accountants, as you "may need it to prove your pay, tax paid and tax status to a third party" such as for loan applications or a self-assessment tax return.

What is the difference between a P60 and P45?

The two tax forms that you’ll "come across quite often" in your working life, said Starling Bank, are the P60 and P45.

A P45 is used when employees change jobs and the P60 is used to "summarise the employee’s tax information".

Your employer is required to give you a P45 when you leave a job, summarising "your income and tax payments so far in the year", said TaxScouts, and it is "another document you should take good care of".

Who gets a P60?

Anyone getting a salary on 5 April should receive a P60 by 31 May, said Crunch Accounting, but you will need to "issue yourself" with one if you run a limited company and take a salary.

If you have more than one job, added GoSimpleTax, you should get a "separate P60" for each one.

Can a P60 reduce your tax bill?

It is important to "carefully check the information", such as your tax code and earnings on a P60, said Xero.

If you paid too little tax you could face penalties from HMRC, but "too much paid could make you eligible for a tax refund".

You could get an "automatic repayment", said the Daily Express, if HMRC calculates that you paid too much tax. This could be if you started a new job and were “switched to an emergency tax code at some point in the year”.

You can contact HMRC or tell your employer if you think you have overpaid tax.

The "bad news" though, added the newspaper, is that you could owe money if the details were incorrect and you "actually underpaid your tax for the year".