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How to Fill Out a P60 Form Correctly

The P60 End of Year Certificate is a form showing how much an employee has earned over the tax year and includes their PAYE income tax and National Insurance contributions. The employee’s employer is responsible for filling out the form, including all bonuses, benefits, hours worked and the salary of each employee.

The P60 form is important as it serves as evidence that an individual has paid their tax. When a person applies for a mortgage or property rental, the lender may request a copy of the form as proof of their salary. This is why it is vital that the P60 form is filled out correctly.

Producing P60 forms as an employer

Employers can usually use their payroll software to produce P60 forms and submit them to HMRC online. If your payroll software doesn’t appear to have this option, you should first contact the payroll software provider or check their website for information about how to do it.

HMRC basic PAYE tools

If the payroll software cannot do the job, then the alternative is to use HMRC’s Basic PAYE Tools to produce the P60s. It is a free payroll software for businesses with fewer than ten employees that enables you to perform most payroll tasks. This includes working out the tax and National Insurance for your employees.

Other tasks you can use the Basic PAYE Tools software to perform include:

  • Checking a new employee’s National Insurance number

  • Sending an Employer Payment Summary

  • Sending an Earlier Year Update

To use the tools, you must first register with HMRC as an employer and get a login for PAYE Online.

The system requirements for the Basic PAYE Tools include an Intel-compatible CPU that supports the SSE2 instruction set. It should operate perfectly fine on modern operating systems and all the major browsers are also supported.

Anyone who is exempt from online payroll reporting can also use the Basic PAYE Tools.

Online payroll reporting exemptions

There is a small number of employers who have the option of sending their company’s payroll submissions to HMRC on paper. To become exempt, you must write to HMRC with a detailed application for their consideration.

Employers’ P60 responsibilities

Employers must give a P60 form to each of their employees by 31 May after the end of each tax year, which runs from 6 April to 5 April. There is no need to provide a P60 to any former employees as they receive the P45 form showing salary and tax information when their employment comes to an end.

Each employee should only receive one P60, even if the employee was employed on multiple separate jobs.

Any company with an in-house payroll system will have to produce its own P60s, either via its payroll software or the Basic PAYE Tools. Accountants or outsourced payroll systems can also produce P60s for the companies they work with.

P60s should be issued on paper, unless the employee agrees to have it issued digitally.

Changing P60 errors

Incorrect information can sometimes happen when producing P60s, especially if a company’s HR and payroll systems are not well integrated. It can also happen when the details of employees are not checked and updated regularly. 

Once an error has been identified, the changes need to be made on the software that produces the P60. You can then simply produce a new P60 that should be marked “Replacement” and issue this to the employee.

Alternatively, an employer can write an official letter confirming the change of information and give this to the employee.

We Can Help

If you’re interested in finding out more about how to fill out a P60 correctly, or any other aspect of your business finances, then get in touch with our financial experts. Find out how GoCardless can help you with ad hoc payments or recurring payments.

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