The PAYE system imposes a number of annual reporting tasks on our clients who are employers. One of these tasks is the requirement to give each employee employed at 5 April at the end of the tax year a statement of their total pay and deductions for that tax year (a P60) by the following 31 May. Clients with employees on the payroll on 5 April 2021 must give them their P60 for 2020/21 by 31 May 2021.
The P60 will normally be produced by the payroll software package (including HMRC’s Basic PAYE Tools where this is used). However, paper copies can be ordered from HMRC – it is not possible to download blank copies online from the Gov.uk website. P60s can be given to employees electronically or in paper format.
Once a P60 has been issued, if you need to change it, you can either give the employee a replacement P60, which should be clearly marked ‘replacement’. Again, this can be provided electronically or in paper format. Alternatively, you can give the employee a letter confirming the changes.
Where you have payrolled benefits provided to employees in the 2020/21 tax year, the employees must be given the following information by 1 June 2021:
- details of the benefits payrolled;
- their cash equivalent value;
- where the benefit is made available under and Optional Remuneration Arrangement (OpRA), such as a salary sacrifice scheme, details of the relevant amount payrolled; and
- details of any benefits not payrolled.
The information can be provided on the employees’ payslips or in a separate note or statement, making it clear what benefits have been subject to tax under PAYE and the value of the benefit reported to HMRC and on which tax has been collected. The employee will need this information if they complete a self-assessment tax return.
Written by the Tax Advice Network