P60s + P45s

What are they and what’s the difference between them?

Firstly, it’s worth mentioning that P60s and P45s are relating to employed work only.

What are they?

They’re essentially a giant payslip that covers the whole tax year for any given employer (or until you leave them if that's before the end of the tax year). A summary of your income from your employer plus any deductions your employer made from your income during the year (income tax, national insurance contributions, student loan etc.) that have been taken from your salary to be paid to HMRC on your behalf.

What’s the difference?

Your employment status with each employer determines which one you get. You receive a P60 at the end of the tax year if you are still employed by the employer. Where as if your employment ends with that employer, you get a P45. You should get the P45 as soon as your employment has ended. If your employer doesn’t send you one once you’ve left their employment, request it.

When do I get them?

You should get EITHER a P60 or a P45 every tax year from each employer that you have worked for during that tax year. For example, if you’ve had 2 employers throughout the tax year, you should get 2 documents. A tax year runs from 6th April to 5th April the following year. If you are still employed at the end of the tax year, then your employer is required to provide you with a P60 by the 31st May (8 weeks after the tax year ends) - for a P45, they are simply encouraged to supply one without delay.

Should I keep them?

Yes, absolutely keep hold of these. For me, I’ve always received my P60s/P45s via email (so it’s super easy to have them at hand), but you can get them in paper form too. Keeping hold of these is crucial because they contain all the information you need for any employed work in order to do your tax return. You’ll see in our tax return guide that, when filling out your tax return, employed information is sometimes already filled in for you. This is because your employer has already communicated this information to HMRC. If your employed income and income tax/N.I. information is already completed for you in your tax return, this should marry the information you have from that employer on your P60 or P45.

It’s completely normal to have both employed and self-employed work in our industry however, if you do, it’s all the more important to be recording all of your income correctly. It’s super easy. With employed work, I record it as soon as I’ve got my payslip through including any income tax or N.I. deductions. With my self-employed jobs I tend to record it as soon as I’ve done the work so I can get the invoice sent off ASAP. The sooner the invoice is sent, the sooner your payment is due! More on invoices here. You can try our Web App for free now and get recording all of your employed and self-employed information. It’ll give you all your figures in order to do your tax return as well as showing you your predicted tax and national insurance bill.

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Love Jo and James x