The tax form 60 is generated by HMRC and your pension providers or employers ensure to hand over this to you. However, do you know what is the importance of P60? It is imperative to understand how important this tax form is because it has the details of what is the amount of money you are taking as an income and the amount you have paid as tax in a specific tax year. Normally you receive the tax form P60 on the sixth of April. You must know that the business financial year starts is on the 6th of April and ends on the 5th of April the next year. The income tax contribution and national insurance you have paid during this period are also part of form P60.
However, you still need to understand a few basic things about the importance of the P60 tax form. Here in this guide, we have got you covered with the necessary details that you should know. This includes the discussion of what is P60 tax form, why is it important, what is the need to get one, and the difference between the form P60 and P45.
Reach out to our intelligent and clever-minded guys who will love to answer your questions about the importance of P60 and other relevant queries.
What is the Importance of the P60 Tax Form?
As mentioned earlier, P60 tax form refers to a tax form that is generated automatically by HMRC and it provides you with this form either by your employer or your pension provider by the end of every tax year. It has a record of your yearly earnings as to how much you have earned in a specific tax year and how much tax you have paid according to your income. It does not make any difference how much amount you pay as tax or how you choose to pay the tax as it does not affect the form P60. You will get this form once in a tax year. However, HMRC tends to generate this form with the help of the followings:
- The amount your pension provider has sent to HMRC and how much you have paid it as a private pension contribution.
- The Department for Work and Pensions (DWP) helps HMRC to provide information on whether you are getting any benefits from the government or not.
- If you submit your tax returns, that is a source of information for HMRC as well.
- The details of your income, benefits and the amount of tax that you pay will be provided by your employer and will be a source for HMRC.
What is the Need to Get a P60 Tax Form?
The importance of the tax form P60 is realised when you know that it does not have the record of the money you have paid, but also the amount of income that you have earned over the last period of a tax year. This information is useful for you as an individual in different scenarios. Some prominent points include the following:
- This will help you when you find yourself eligible enough to claim a benefit.
- In a case where you have overpaid the amount of tax to HMRC and now you have to claim back, this information and tax form will help you through the process.
- If you need a mortgage application for any certain reason, this form will play the role of evidence of your amount of income.
The Difference Between the Tax Forms – P45 and P60
Most of you may be aware of the fact that form P45 is only received from your employer when you quit a certain job. However, in the case of tax form P60, you get to receive it from your employer by the end of every tax year. Moreover, when an individual applies for a new job, he is required to provide the form P45 as it is demanded by the new employers. In case you do not have the form with you, they tend to fill in the new form for you at the new company.
What Includes in the P60 Tax Form – How Do I Get it?
If you wondering how to get the P60 form in case it is not provided to you by your employer. It is simple to get in touch with HMRC and request your form with an authentic reason. At some point in life, every employee tends to need this form and most of you know that it has the details of the amount of tax you have paid and the income you have earned. You can even receive your form P60 electronically. The information contains in this includes the following to be exact:
- Details of leave payments if you have availed of any adoption leave, paternity leave, or maternity leave.
- Student loan payment deductions if there are any.
- The amount of income you have earned over the period of last tax year.
- The details of your employer.
- Your national insurance number.
The Bottom Line
Now that you have gathered a fair amount of information about the importance of P60, we can bring the discussion towards wrapping up. The role of tax form P60 is important to make your annual income and the tax payment evident at any point in life. Usually, you should get your tax form from your employer at the end of every tax year, however, in case you do not get it from your boss, get in touch with HMRC. You can get it immediately via an electronic medium as well. However, if you have time, you can wait for the hard copy. We hope these few minutes of reading will help you to understand the importance of your tax form P60.
Disclaimer: The general information provided in this blog about the importance of P60 includes text and graphics. It does not intend to disregard any of the professional advice.