If you are an employee, there are certain tax forms that your employer is obliged to provide you with. These forms contain important information about your salary, benefits and the tax you have paid and so you should know what information each of these forms contains.
You receive a P45 from your employer when you stop working for them. It is a record of your pay and the tax that has been deducted from it from the start of the tax year to the date of the end of your employment.
Information contained on a P45 form includes:
- your tax code and PAYE (Pay As You Earn) reference number
- the date you left your employment
- your total earnings in the current tax year
- your National Insurance number
- how much tax you paid on your earnings
A P45 is made up of four parts. Your employer sends Part 1 to HMRC and gives you Parts 1A, Part 2 and Part 3. You keep Part 1A and you give Part 2 and Part 3 to your new employer or to the Jobcentre if you are claiming Jobseeker’s Allowance.
You should automatically receive a P45 when you cease working for an employer. You are entitled to it by law.
Your employer uses a P11D form to tell HM Revenue and Customs about the value of any ‘benefits in kind’ that you have received during the tax year. ‘Benefits in kind’ are perks that effectively increase your income, such as:
- private health insurance
- a company car
- interest free loans
Your employer will only declare them if you have earned at least £8,500 in the year, including the value of the benefits. Your employer works out the value of each benefit before reporting it to HMRC. You will also receive a copy for your records.
There are some instances where you won’t have a P45 when you start a new job. For example, you may be starting your first job or you may be taking on a second job without giving up your other one. In this situation, your new employer will give you a form P46 to complete.
A P46 contains information such as:
- whether you have got another job
- whether you have been claiming Jobseeker’s Allowance
- whether you are paying off a student loan
- whether this is your first job
Your P60 is the summary of your pay and the tax that has been deducted from it in the tax year.
Your employer should give you a P60 to keep at the end of every tax year (which runs from 6 April to 5 April the next year). Again, you are entitled by law to receive a P60 if you are still working for your employer at the end of the tax year.
Your P60 is useful if you have to complete a Self Assessment tax return or two claim back any tax you have overpaid. You may also need your P60 to prove your income to a lender if you are applying for a mortgage or other loan.