Pay As You Earn (PAYE) tax forms date back to 1944. It was an initiative to overthrow the old annual and half-yearly tax collection system. This change was required as there was a growing number of taxpayers. With this new form of tax collection, employers deduct income tax and national insurance contributions directly from the salaries.  

Now for starters and even those who have been using the PAYE system, there are forms that you will need to include in your payroll to show how much is being paid to Her Majesty’s Revenue and Customs (HMRC) by each employee. HMRC is a non-ministerial department of the UK government solely responsible for the collection of taxes. The forms include the P60, P45, and P11D forms.  

Many problems can arise if you are under the PAYE system. In situations when you are starting a new job, have more than one job, other taxable income, or your employer or HMRC makes a mistake, etc., you are left with questions for which the answers are hard to find. This article will be a complete guide on how to get each form and answer all your frequently asked questions.  

Let’s get familiar with the forms.  

THE P60 

P60 end of year certificate

This particular form has the record of all the money you have been paid and the tax deducted from it by HMRC. It is a record of your total earnings from jobs or pension in the previous tax year.  

Who is it for?  

This form is probably the most essential tax document that anyone with long term employment should have. Anyone legally earning an income under an employer is subjected to have a P60 form. For those who are self-employed and do not work for anyone for payroll don’t have to have this form.  

Who provides it and when?  

You are legally entitled to have this document once you are employed. It is your employer’s duty to provide you with this form by the end of the first tax year, which is April 6. If an employee is working on April 5 of any year, then the employer is legally subjected to give them a P60 form (either electronically or on paper) by May 31 or prior. In case you have multiple jobs, then all your employers are subjected to give a separate P60 form.  

Why do you need it?  

If you are on a payroll and paying tax under the PAYE system, then it is crucial that you know why P60 form is needed. You are going to need a p60 form in case you want to file for a self-assessment tax return. Furthermore, it is a requirement if you wish to apply for a mortgage or tax credits. The last but most vital usage of this form is to file for a tax refund or to argue with HMRC when you have overpaid taxes. In case HMRC ever asks you to prove your tax returns you will need the P60 forms since they act as a solid proof.  

Lost your P60 form?  

Here is what you can do. The employer is legally subjected to keep a record of the last three years of p60 forms of all employees. In case of a mishap happening to an employee’s p60 or they lose it, the employer can always provide you with a duplicate copy. In case an employee loses a p60 form dating back to more than three years, the employer can give them with a company headed statement of earnings. Moreover, for tax records dating back to 3 years or more, you can ask HMRC who can provide alternative forms of records for your tax returns.  

The P45  

P45 Form

The actual name of this form is “Details of employee leaving work.” As the name suggests, it contains all the details of an employee during the time they have worked for an employer. It has a record of all payrolls including the salaries and tax paid in one tax year.  

A p45 is made up of 4 parts.  

Part 1  

Part 1 of the P45 form is sent to HMRC by the employer. HMRC then takes all the appropriate elements from Part 1 and uses them on the employee’s taxpayer record.  

Part 1A  

The employee keeps this part of P45 for their records.  

Parts 2 and 3 

These two parts are given to the new employer, or in situations where you are not working, to Jobcentre Plus. For employers who have just started working, they are supposed to forward part 3 to HMRC to let them know that they have employed the individual.  

Who is it for?  

P45 is for anyone who is leaving a job. Whether you are switching careers or leaving one job and plan on having another at some point in the future, p45 is an essential document for you.  

Who provides it and when?  

An employer is legally obliged to provide all employees with a P45 form when they leave. The employer should automatically send a p45 to the employee if they are leaving work. In case the employer doesn’t, then the employee can remind them that it is a legal obligation to provide all ex-employees with the p45 form. If the old employer still refuses to send the p45, then the employee can ask for a statement of earnings instead. If the employer refuses to provide that as well, then, the employee can contact HMRC and take legal action.  

Why do you need it?  

A p45 form is required if you are starting a new job or applying for a pension. The new employer or your pension provider needs to know your tax code. The employer then assesses the tax you have been paying on your income and work out your new payroll and the amount to deduct as tax. The pension provider, on the other hand, will use it to work out your pension payments.  

Lost your P45 form or don’t have one?  

If an individual loses their p45 form, then a duplicate copy cannot be asked for because employers do not generate them. However, a new employer needs your p45 form to work out the amount of tax you should be paying on your income.  

New employers ask employees to fill a Starter Checklist in case it is their first job, or they have lost their p45 form or they are working part-time as a second job. This checklist has many questions related to any other jobs, benefits, or student loans you may have.  

The P11D  

What is it?  

A P11D form is a report your employer uses to enlighten HMRC concerning the employment benefits, you’re getting. It permits UK based employers to detail the money counterparts of benefits and expenses that they have given during the assessment year to their directors, and workers acquiring at the rate of more than £8,500 every year.  

Who is it for?  

Any employee legally working under an employer who is receiving employment benefits is subjected to receive this form or can ask their employer. This form is not useful to the employee. It is basically for the employer so that they can work out the monetary costs of the benefits provided to the employee to work out the tax that should be charged on the benefits. An employee can use it to keep a record.  

Who provides it and when?  

All employers are obliged to send the p11d forms to HMRC every tax year of all employees earning more than £8,500. The employer usually sends a copy to the employee as well. In case a copy is not provided, the employee can ask for it.  

Why do you need it?  

An employer needs it to calculate the cash value of all the benefits provided and charge tax on them whereas an employee will need it to keep a check on whether the tax being charged is the right amount or not.  

Lost your P11D form?  

You can usually get a copy of the P11D from your employer. If they can’t give you one, you can contact HMRC for a copy.  

Don’t know what to do if any of these forms are wrong?  

If there are any discrepancies in the forms mentioned above the employee can file an official complaint to HMRC. If it is a fault on the employer’s end or a fraud, legal action can be taken.  

The forms can have problems if they are not checked regularly and properly. Moreover, if an employee or employer isn’t aware of all the aspects of filing a tax return under PAYE, it becomes very hectic. To avoid these difficulties, you can hire Accountants who will help you with reporting and payment of your payroll. They are actively working with businesses and limited companies and are open to welcoming more. With them, you can easily focus on other productive tasks and leave the hassle of filing tax of employees to them.