All the three - P45, P60 and P11D are Pay-as-You-Earn (PAYE) forms. Two forms, P45 and P60, are given by employers to their employees. These two forms contain information regarding the tax an employee pays on the income. If an employee receives benefits or expenses, the employer will send a P11D form to HM Revenue and Customs (HMRC).
Form P45 is issued to an employee by an employer when an employee stops working. The complete title of the form is Details of employee leaving work, but it is usually referred to by the reference code of P45. As per the law, an employer is required to provide an employee with the P45s form when he / she resign and leave the organisation. The P45 form shows how much tax an employee has paid on the salary in the tax year. The form P45 encloses 4 parts: Part 1, Part 1A, Part 2 and Part 3.
- Part 1 of the P45 form is sent to HMRC by the employer. HMRC uses this to record the appropriate details on an individual's taxpayer record
- Part 1A should be kept by the employee
- Both, Parts 2 and 3, are given to either a new employee or to Jobcentre Plus (if applicable)
In certain cases, if an individual takes up a first time job or has been in self-employment, he / she may not have a P45. When such a situation arises, it is likely that the new employer will use a Starter Checklist to gather the required information. Doing so will help them to figure out the correct tax code for applicable for an employee.
Form P60 (End of Year Certificate) shows how much tax an individual has paid on the salary during the tax year. As per the law, an employer must provide their employee with a P60 if he / she are on payrolls on 5 April. An employer can provide the form P60 either on paper or electronically - as long as it's done by 31 May. As P60 is proof of how much tax was paid on the salary, it is required when applying for tax credits, claiming back overpaid tax, and also as proof of income when applying for mortgages and loans.
If an individual receives any 'benefits in kind' for the employer such as a company car on an interest-free loan, the employer will send a P11D to HMRC. Each employer is required tosend a P11D to HMRC for employees earning a minimum of £8,500.00 (including the value of company benefits) in a tax year. It is not an official obligation for an employer to provide an employee with a copy, but employers usually provide. An employer is required to inform an employee about what's on the P11D form.The most recent P11D form contains 14 sections covering the following P11D operating expense:
- Section A covers assets transfer
- Section B covers payments made on an employee's behalf
- Section C includes credit cards and voucher details
- Section D includes accommodation details
- Section E includes mileage allowances
- Section F - cars and car fuel details
- Section G - company vans
- Section H - beneficial loans
- Section I - medical health information
- Section J - qualifying repositioning payments
- Section K - services offered
- Section L - Assets placed at employee's disposal
- Section M - Other Items
- Section N - Expenses Payments
LOST PAYE FORMS
If a P45 is lost, an individual can't get a replacement P45. Instead, the new employer can give a P46, or send the relevant details about the finances to HMRC. Form P46 refers to 'Employee without the form P45' and employee will usually fill in a P46 if he / she start a new job and the previous P45 is unavailable.The P46 tax form is essential because it helps an employee to pay the correct amount of income tax. If an employee does not have a P45, or fail to complete a P46, the employer will by and large need to use an emergency tax code against the salary which means that an employee can over pay tax. The most common reasons why an employee would need a P46 tax form are because:
- He / she can't provide the new employer with the last P45 form
- He / she is starting their first ever job
- He / she is starting a second job without leaving the current employment
If an employee has been given a P60 form by the employer, he / she can ask for a statement of earnings which provides details of the same information, and can be used as a direct replacement for a P60. DNS Accountants can help employees with P60; work expenses tax relief claims or any other income tax issues. Form P60 is really significant, and it is suggested that an employee keeps all of the P60 forms for the last four tax years. The following reasons will help to understand why an employee might need a P60 form:
- Sometimes the P60 details are not on record with the tax office. If this is the case and an employee applies for a P60 tax refund or a tax rebate, the money he / she are payable cannot be paid until the P60 has been located. Providing a P60 to the tax office will mean that the records can be updated swiftly and the tax rebate can be issued
- When a individual will apply for credit (apply for a mortgage) he / she will usually have to provide proof of earnings, like a P60 form
An employee can usually get a copy of the P11D from the employer or can contact HMRC for a copy.
In short, an employee can't get a replacement P45. Instead, a new employer may issue a 'Starter Checklist' or ask the employee about the relevant details pertaining to finances to send to HMRC. For form P60, an employee can get a replacement from the employer and for form P11D an employee can usually get a copy from the employer or contact HMRC for a copy. For any queries, we suggest visiting our website www.dnsassociates.co.uk and contact us on our # +44-333-130-5749 or e-mail at: firstname.lastname@example.org.
HOW CAN DNS ACCOUNTANTS HELP IN THE UK
Our accounting and taxation knowledge at DNS Accountants can help businesses with any income tax issues and accounting as well as tax rebate claims. From checking the tax code, to submitting the maximised work expenses tax relief claim - our team of ACAs and CAs make sure that the clients are fully satisfied with our service. Our other services include:
- Guidance around form P45, P60 and P11D
- Self assessment
- Auto enrolment
- Inheritance tax guidance, and individual and business taxation
- Value added tax (VAT) planning, along with others
- HR and payroll services
- Accounting and bookkeeping services