The P800, P45, P60, and P11D forms are used for the PAYE scheme.
Pay As You Earn, or PAYE, is the process whereby the taxes you owe on your income are taken off your pay before you receive it. This is done by your employer, who pays that money to HMRC.
If you pay taxes via PAYE and your only income is a single salary, it is unlikely that you will have to submit a Self Assessment tax return. However, you will still encounter several forms which are important for you to keep track of and understand to make sure you, or your employer on your behalf, are paying the right amount of tax.
When you stop working at a job, your employer must supply you with a P45 form. This form details how much tax you have paid on your salary so far for that tax year. Tax years run from 6 April to 5 April the following year.
P45 forms are important for your new employer to work out how much tax should be deducted from your salary.
The P45 has four parts:
- Part 1, which your employer sends to HMRC.
- Part 1A, which you should keep in your own records.
- Part 2 and 3, which you give to your new employer (or Jobcentre Plus if you are not working).
what if i cannot get a p45 from my employer?
If you cannot get a P45 from your previous job, or if you are taking on a second job, your new employer will have to determine how much tax you should be paying.
Employers have to get information from you about any other jobs you work, any student loans you have outstanding, and any benefits that you receive. They may ask you to fill in HMRC’s own ‘starter checklist’ that asks for all the details needed for PAYE.
The P60 form details how much tax you paid on your salary via PAYE. If you have multiple jobs, you will get a P60 from each of them. If you work for an employer on 5 April, that employer must provide you with your P60 by May 31st of that year.
You’ll need your P60 to prove how much tax you’ve paid on your salary, for things like:
- Claiming back overpaid tax.
- Applying for tax credits.
- As proof of your income if you apply for a loan or a mortgage.
What if I do not get a P60 from my employer?
P11D forms are used to report your ‘Benefits in Kind’ (or simply ‘benefits’) to HMRC. Benefits are anything given to you by an employer that has monetary value and is not wholly necessary for your work.
Using the company car to travel from the office to a work site is a necessary business expense not a benefit for you, the employee. Free meals at work are not strictly necessary, and count as a benefit.
Why must I declare my work benefits?
It is important to tax employee benefits, as they would otherwise just become a way to get around income tax. However, there are many company benefits which are considered tax-free, including meals, a mobile phone, or workplace parking.
You will need to pay tax on benefits like accommodation, medical insurance, and private pensions. The P11D form is what you will need to fill out to tell HMRC about the benefits you receive.
Paying tax on benefits involves working out how much a benefit is worth in cash. Your employer must do this and give those details to you. You may not need to fill in a P11D if your employer already takes the tax owed from benefits out of your salary.
You will receive a P800 form, also known as a ‘tax calculation letter’, if HMRC believes you have paid the wrong amount of tax – either too much or too little.
If you are due a refund, you must claim it online within 21 days or you will be sent a cheque in the mail.
If you owe tax, HMRC will automatically collect this over the course of the next year, usually through your employer and the PAYE amounts taken off your salary.
What if I receive a simple assessment letter?
If you owe more than £3,000, have to pay tax on your State Pension, or owe tax that cannot be taken off your salary, you will receive a Simple Assessment Letter instead of the P800.
You will have to pay this amount by 31 January, or within 3 months if you received the letter after 31 October.
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