Did you know that the deadline for receiving your P60 is the 31st of May? If you haven’t got yours yet, it’s high time you gave your employer a nudge. But what happens when you do get it? For many of us, the P60 is a bit of a mystery—a form filled with numbers and tax codes that can seem as clear as mud. But here’s the thing: understanding your P60 is crucial.
It’s more than just a piece of paper; it’s a snapshot of your earnings and taxes for the year. It’s a key document when you’re applying for a mortgage, claiming a tax refund, or even just trying to budget for the year ahead. So, it’s worth taking the time to understand it. In this article, we’re going to unravel the mystery of the P60, highlight the common errors that can creep in, and show you how to spot them.
So, buckle up and let’s get started on this journey to demystify the P60.
What is a P60?
We’ve all asked this question at some point, haven’t we? A P60 is a summary of your pay and the tax that’s been deducted from it in a tax year. It’s a crucial piece of paper, especially if you’re dealing with tax refunds, applying for a mortgage, or proving your income to the powers that be.
But it’s not just about what a P60 is, it’s also about what it’s for.
What is a P60 for?
Well, it’s a bit like a report card from your employer, showing how much you’ve earned and how much tax you’ve paid. It’s a legal requirement for employers to give you one, and it’s your right to have it. You use your P60 for all sorts of things, like filling in your Self Assessment tax return if you’re self-employed, applying for tax credits, or proving your income if you’re applying for a loan or a mortgage.
How to Read a P60
Reading a P60 can feel like trying to understand a foreign language. But once you know what you’re looking at, it’s not so bad. The first section is all about you – your name, your National Insurance number, and your tax code. Then comes the juicy bit – your pay and tax details.
This shows your total pay from your employer, and the tax that’s been taken from it. It’s worth checking these figures against your own records – mistakes can and do happen.
Common P60 Errors
Now we’re getting to the heart of the matter – the errors. Just like anything else, P60s aren’t immune to mistakes. Here are some of the most common ones:
Incorrect Personal Details
This one’s a no-brainer. If your name, National Insurance number, or tax code is wrong, you’ve got a problem. It’s important to get these details right because they’re used by HMRC to track your tax records.
Wrong Tax Code
Your tax code tells your employer how much tax to take from your pay. If it’s wrong, you could end up paying too much or too little tax. And nobody wants that.
Incorrect Income Details
This is where things can get tricky. If your income details are wrong, it could affect your tax calculation, your benefits, or your ability to get a loan or mortgage.
How to Spot P60 Errors
Spotting errors in your P60 is a bit like playing detective. You need to take a close look at your form, compare it with your own records, and check for any discrepancies. Here are some tips to help you on your way:
Compare with Your Payslips
Your payslips are a record of your pay and tax throughout the year. By comparing them with your P60, you can check that the figures match up.
Check Your Tax Code
Your tax code is used to calculate how much tax you should pay. If it’s wrong, your tax calculation will be too. You can check your tax code on the HMRC website.
Look for Missing Information
A complete P60 should have all the information you need to understand your pay and tax for the year. If anything’s missing, like your total pay or tax paid, that’s a red flag. It’s worth taking the time to go through your P60 with a fine-tooth comb – you never know what you might find.
What to Do If You Spot an Error
So, you’ve found an error in your P60. What now? Well, the first step is to contact your employer. They’re responsible for providing you with a correct P60, and they should be able to fix any errors. If they can’t, or if they’re no longer in business, you can contact HMRC for help. They can provide you with a replacement P60 if you’ve lost yours, and they can also help you correct errors.
Contact Your Employer
If you spot an error in your P60, your first port of call should be your employer. They should be able to correct the error and provide you with a new P60. It’s important to do this as soon as possible, as errors can have a knock-on effect on your tax and benefits.
If your employer can’t help, or if they’re no longer in business, you can contact HMRC. They can provide you with a replacement P60 and help you correct any errors. You can contact them online, by phone, or by post.
The Importance of Checking Your P60
It’s worth taking the time to check your P60 carefully – it’s an important document, and errors can have serious consequences. And remember, if you spot an error, don’t panic – there are steps you can take to get it corrected. So, keep your eyes peeled, and happy P60 checking!
Ready to take the stress out of tax time? Our expert advisors can help you understand your P60 and ensure you’re not paying more tax than you need to. Contact us today to find out more. We’re in Lancashire and serve both Warrington and Nelson, we’d love to hear from you!