Employers must provide employees with their P60 document by May 31 to avoid a £300 fine. The P60 details total pay and deductions for the tax year ending on April 5. Failure to issue the P60 by the deadline incurs an initial fine of £300, followed by daily penalties of up to £60.
Employees on a company payroll at the end of the tax year are entitled to receive a P60. Those with multiple jobs will receive a P60 from each employer. The document is essential for mortgage lenders and banks to verify income and employment status, as well as to ensure accurate tax payments.
The P60 displays the tax code, a combination of numbers and letters indicating the tax deduction from wages or pension. Incorrect tax codes can result from job changes or erroneous information provided to HMRC. The common tax code for individuals with one job or pension is 1257L.
MoneySavingExpert.com offers a free calculator to help assess the accuracy of your tax code. Overpaid tax can be claimed back from HMRC, with a possibility to claim up to four previous years. Circumstances permitting, refunds for overpaid tax from earlier years are issued via a cheque.
If an incorrect tax code leads to underpayment, the amount must be repaid. However, under certain conditions, individuals may seek to have the tax written off if the underpayment was not their fault. Employees who left their job in the previous tax year should have received a P45 summarizing their tax status.