What is a P45, P60 and a Tax Return?
One of the questions we get asked by our clients is what is a P45, what is a P60 and what is a tax return?
P45
A P45 is a form that you will get when you leave a job or employment. It will contain the details of what you have been paid so far during the tax year so far
it will detail the total taxable income
the tax paid
the tax code that has been used to calculate your income
and your personal details.
It should be given to your new employer as soon as possible to make sure that the correct tax is deducted from your pay each month or each week.
P60
A P60 is a form that you will get at the end of the tax year, you will only get the P60 if you are still working for an employer on the 5th of April, if you leave before the 5th of April you will receive a P45 instead.
A P60 will contain the following information
Total paid during the tax year
Total tax deducted during the tax year
If you have moved jobs it will contain the income that you have earned from any previous jobs
It will also give details of any statutory payments made for Maternity and Paternity Pay and deductions made for repayments of Student Loans.
The P60 should be kept safe because you will need it to give to your accountant to prepare your self-assessment tax return for you.
Self-Assessment Tax Return
A Self-Assessment Tax Return is document that may be normally prepared by your accountant and will gather all the sources of your income for a tax year and present them in one document. It will contain all the P45’s and P60’s relevant to the tax year along with the details of any sources of income that you may have such as dividends, rental income, capital gains and pensions.
It is important to know that the tax return will be the only place that any dividends will be shown if you receive payment of them in your limited company. Dividends will not be shown on the P60, P45 or any payslip that you receive from a company.