Your P60 summarises your total pay and deductions for the tax year and also contains your final tax code – so it is important you check this is correct in case you owe money to HMRC
Millions of workers are being urged to keep an eye out for an important tax document. Your employer must issue your latest P60 by May 31, by post or electronically.
Your P60 summarises your total pay and deductions for the tax year. It also contains your final tax code, and it is important you check this is correct in case you owe money to HMRC.
Tax codes are made up of a series of numbers and letters and are assigned to you by HMRC based on the information it has on your income.
But there are a number of reasons why it could be wrong – for example, if you recently changed jobs or if HMRC has been given incorrect information from your employer.
The code shows how much of your income is taken in tax, and everyone who is paid through PAYE has one. The most common code is 1257L for people who have one job or pension – although not everyone will be on this.
If you have a second job, you may have a BR, D0 or D1 tax code, or if you have no personal allowance, you may have an 0T tax code. If you are exempt from paying tax, your tax code would be NT.
Taxpayers in Wales will have a C tax code, and those who pay income tax in Scotland will have an S.
Sarah Coles, personal finance expert at Hargreaves Lansdown, said: “It isn’t always easy to get to grips with your P60, but the thing to look for is the final tax code.
“If it’s wrong, you could end up over-paying or under-paying your tax – either of which is a pain in the neck.”
MoneySavingExpert.com has a free calculator that you can use to get a rough idea about whether your tax code is correct. If it looks like you’ve paid too much tax, then you can claim it back by contacting HMRC by calling 0300 200 3300, or through the HMRC app.
You can claim back up to four additional years. But even if you think you have been overpaying for longer than this, it doesn’t hurt to still contact HMRC.
They may pay back further than four tax years under certain circumstances – for example, if it was their fault that you overpaid tax. For overpaid tax that doesn’t relate to the current tax year, HMRC will send you a cheque in the post with your refund.
If it turns out you’ve not paid enough tax due to an incorrect tax code, then you will have to pay this back. Don’t let this put you off – it is better to sort this out sooner rather than later to avoid being hit with a bigger bill.
You can try and get the tax written off if it was not your fault that you underpaid – but this is not a guarantee. You can do this by asking for an “Extra Statutory Concession” or an A19 from HMRC.