Employers must provide employees with their P60 document by May 31 to avoid a £300 penalty. The P60 outlines total earnings and deductions for the tax year ending on April 5. Failure to issue the P60 by the deadline can result in daily fines of up to £60 thereafter.
Employees on a company’s payroll at the tax year-end must receive a P60. Those with multiple jobs will receive a P60 from each employer. Mortgage lenders and banks often request the P60 to verify income and employment status. It is also essential to review the P60 for accurate tax payments.
The P60 displays the tax code, a combination of numbers and letters indicating the tax deductions from wages or pensions. Incorrect tax codes can result from job changes or erroneous information provided to HMRC by the employer. The common tax code is 1257L, though not universal.
MoneySavingExpert.com offers a free tax code calculator to assess the accuracy of your tax code. If overpaid, individuals can claim a refund from HMRC for up to four previous years. Special circumstances may allow claims for overpaid tax beyond this period.
HMRC issues refunds via cheque for overpaid tax from previous years. Underpaid tax due to an incorrect tax code must be repaid. Individuals can request write-offs for underpaid tax if it was not their fault.
Employees who left a job in the previous tax year should have received a P45 summarizing tax details. Opt for Daily Mirror as a ‘Preferred Source’ on Google News for convenient access to preferred news content.