P45 vs P60: Which Form Do You Need and Why?

Tax paperwork can feel overwhelming, especially when different forms land on your desk with unfamiliar names. Among the most common, and often most confusing, are the P45 and P60. Many people wonder: Do I really need both, and what’s the difference?

In this post, we’ll clear up the confusion by walking through what each form represents, why they matter for your records, and how understanding them can save you headaches during tax season.

What Is the P45 Form?

The P45 form is an important document for your pay and income tax. It helps keep your tax records accurate and ensures the right information is passed on when you change jobs.

A P45 statement is given to you when you leave a job with a company, showing your pay and tax details up to your final working day.

This form is essential for your tax period coverage and allows your new employer to apply the correct tax code.

What Details Are on a P45?

When you get a P45 after your job ends, you will see it has important details about your pay and tax payments from that job. Your former employer puts this information together. This is so your next employer can know about your tax for the year.

A P45 has some important details. These are:

• Your tax code and your PAYE reference number.
• Your National Insurance number.
• Your total earnings and the tax you paid in that job up to your last day.

What Is the Purpose of a P45?

When you give your P45 to your new job, it helps them use the right tax code to determine the appropriate tax rate. If you do not hand it in, you may be put on an emergency tax code, which could result in you paying too much tax at first, until things are fixed with HMRC.

Besides starting a new job, you can also use the P45 for other money matters. You may need the P45 if you want to fill out a tax return.

It is also handy when you apply for tax credits or ask for a tax refund if you paid too much. The P45 shows what you got paid and how much tax you paid during that job time.

What Are the Structure and Components of a P45?

A P45 is not just one paper form. It has four different parts. Each part needs to go to a different place. Knowing this can help you see how your tax information gets shared after you leave your job.

The parts are distributed as follows:

• Part 1: Your old employer will send this part right to HMRC.
• Part 1A: You need to keep this part safe for your own records.
• Parts 2 and 3: Give these parts to your new employer.

What Is the P60 Form?

The P60 form is a year-end summary of your pay, income tax, and National Insurance from your current employer. It’s issued after the tax year ends (6 April–5 April) and you’ll get one from each employer you work for at that time.

It serves as proof of income and tax paid, useful for checking deductions, completing a Self-Assessment, or applying for loans, mortgages, and tax credits.

A P60 comes out once a year. If you work for someone on April 5th, which is the end of the tax year, that employer must give you a P60. They have to do this by May 31st.

What Details Are on a P60?

A P60 form shows what you earned and how much tax was taken from your pay in the tax year. Your employer gives this form to you. It helps you see your income and any taxes you paid.

Specifically, your P60 will detail:

• The tax year that the summary is for.
• Your total pay before any money was taken out.
• The final tax code that your employer used for you in that year.
• The total amount of tax and National Insurance is taken from your pay.

This form may also have details about student loan deductions or any payments the law asks you to make.

What Is the Purpose of a P60?

The P60 acts as proof of income and deductions. It is essential for:

• Checking the accuracy of your tax and NI deductions.
• Filing a Self-Assessment tax return.
• Applying for loans, mortgages, and tax credits.

What Are the Structure and Components of a P60?

Your P60 shows a full summary of your overall pay and tax for the entire tax year, which can be useful for loan applications. It is not like a P45, as that paper only looks at part of the year. A P60 brings together all the pay and tax details from one employer for the whole tax year and puts it in one simple document.

The key elements you’ll find on your P60 include:

• Your full name and National Insurance number.
• Employer’s name and PAYE reference.
• Total earnings for the tax year.
• Total income tax and NI contributions paid.

What Are the Main Differences Between P45 and P60?

Here is a table explaining the main differences between the two PAYE forms:

What Are P45 VS P60 Used For?

Both the P45 and P60 forms do more than just help you keep track of paperwork.

Here are some common use cases for each form:

• P45: A new employee must give this to their new employer. It helps the employer use the correct tax code. It is also needed if you want to claim tax refunds after you leave a job and are not working.
• P60: This is proof of all your income for the year. People use it when they apply for a loan or a mortgage. It also shows the final numbers you need for your tax return if you do a Self-Assessment.

Why Are Both P45 and P60 Important for Employees and Employers?

Together, P45 and P60 forms keep your tax records accurate, ensure compliance, and provide the details you’ll need for a tax return, making them equally important in managing your finances.

What Are the Legal Requirements for Issuing P45 and P60 Forms?

Employers in the UK have to give their workers P45 and P60 forms at the right times. This is not something they can choose to do or not do. The forms are needed because hm revenue says so under the PAYE system. If an employer does not give these forms, they can get in trouble and face penalties.

• A P45 must be given immediately when an employee leaves, in paper or digital form. It’s needed for starting a new job or claiming benefits.
• A P60 must be given to every employee still on payroll on 5 April, issued by 31 May each year.

How Each Form Impacts Tax and Employment Records?

Both forms play key roles in your tax and work records.

• A P45 is issued when you leave a job and gives your new employer the tax details they need to put you on the correct code, helping avoid emergency tax.
• A P60 is issued at year-end, showing your total income and tax paid with one employer. It’s often needed for Self-Assessment, tax credits, or proving earnings.

Together, the P45 links one job to the next, while the P60 acts as your yearly tax record.

How Do Employees Obtain P45 and P60?

It’s easy to get these forms, as your employer will take care of it. You do not need to ask or apply for them. They should come to you on their own.

• A P45 comes from your old employer when you leave a job.
• A P60 comes from your current employer after the tax year ends, created through their payroll system.

Getting a P45 When Leaving a Job

When you leave a job, your old employer must give you a P45 right away, usually on your last working day or shortly after. This form is really useful if you’re starting a new job, because it passes on all your tax details so your new employer can put you on the right tax code from the start.

If you don’t get your P45, ask your previous employer; they’re legally required to provide it.

And if you start a new job without one, don’t worry. Your new employer will ask you to fill in a starter checklist, which lets them set up a temporary tax code until your P45 arrives.

Remember, you only get one P45 for each job, so keep it safe until you hand it over to your new employer.

Receiving Your P60 at the End of the Tax Year

Your P60 is a tax certificate you get every year from your current employer. It covers the whole tax year (6 April to 5 April) and must be given to you by 31 May.

The P60 is produced through your employer’s payroll system and can be sent as a paper copy or electronically. If you have more than one job on 5 April, you’ll get a P60 from each employer, showing the pay and tax for that role.

What Are the Best Practices for Employers and Employees?

Both employers and employees have responsibilities when it comes to P45 and P60 forms. Following these simple steps helps ensure accuracy, compliance, and smooth payroll management.

For Employees

• Keep your P45s and P60s for at least 6 years.
• Compare your P60 with your final payslip to check figures match.
• Hand your P45 to your new employer promptly to get the right tax code.
• Store these records safely to prove income or NI contributions if needed.

For Employers

• Issue a P45 immediately when an employee leaves.
• Provide a P60 to all employees by 31 May each year.
• Use payroll software to stay accurate, timely, and compliant.

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Conclusion

To sum up, knowing the difference between the P45 and P60 forms is important for both employees and employers to ensure accurate tax calculations.

The P45 and P60 each have their own use in a job. A P45 is given when you leave a job. A P60 is handed out at the end of the tax year and shows your yearly pay and tax deductions.

If you know about these forms, it helps you follow the law and keep your money records in order.

Frequently Asked Questions

Can a P60 replace a P45 when starting a new job?

No, you cannot use a P60 instead of a P45 when you start a new job. A P60 is for past tax years. Your new employer needs details from your P45 from the current tax year. This helps your new job put you on the right tax code and stops you from being put on an emergency tax code. A P60 does not give your new employer enough information to use the correct tax code for you.

Are there differences in P45 and P60 forms for expats?

Yes, US expats need to keep their P45 and P60 forms. The tax records in these forms show UK job and pay details, and the taxes that have been paid in another country. You will need these when you do a US tax return. They can help you prove a tax year’s work and the taxes you paid. This is very important if you want to get tax credits. These can lower or even take away what you owe the US for that tax year.

What do you do if your employer won’t issue your P45?

Your former employer has to give you a P45 when your job ends, or upon termination of employment. If they do not, you should reach out to them and ask for it. If you still do not get the P45, you can contact HM Revenue & Customs (HMRC) for help with what to do next.

What happens when you retire?

Retirement is looked at the same as leaving any other job, so your previous employer will give you a P45. This paper is important for your tax records when you move to getting a pension. It helps make sure your income tax is right. You can also use it if you need to claim tax credits.

What’s the difference between P45, P60, and P11D forms?

These PAYE forms tell the tax office about different things. A P45 gives your job and employment details when you leave a place of work. A P60 shows what you were paid and what was taken out for tax and national insurance contributions in that tax year. A P11D is for when your boss gives you benefits or covers expenses, like for a company car or private medical insurance.

How long is a P45 valid for?

A P45 is meant for the tax year when you leave a job. You can’t use a P45 from an old tax year for your new job. The form helps when you change work right away. The details on the P45 and your other tax records need to stay with you for at least six years.

How can you use P45 and P60 for self-assessment and other tax purposes?

Both forms are very important for a self assessment tax return. Your P60 shows the final numbers for pay and the amount of tax for the tax period, which is essential for completing your self assessment tax return accurately. If you have changed jobs, you will also need details from your P45 to fill your tax return in the right way.

What to do if you lose your P45 or P60?

If you lose your P60, you can ask your current employer to give you a copy. If you lose your P45, your old employer cannot give you another one. You should let your new employer know about this. They will ask you to fill out a starter checklist. You can also talk to HM Revenue & Customs if you want to see your tax history.

Does a P45 have an impact on the payroll PAYE? (UK)

Yes. A P45 shows your previous pay and tax details, which helps your new employer apply the correct tax code and avoid you paying too much or too little tax under PAYE.

What is a P45 and New Starter Checklist?

A P45 is the form you receive when leaving a job, showing how much you’ve been paid and taxed so far. If you don’t have one, your new employer uses a New Starter Checklist to assign the correct tax code.

How long does a P45 last?

A P45 doesn’t technically expire, but it only applies to the tax year in which it’s issued. If unused, your new employer may need to rely on a New Starter Checklist instead.

What is a P45 and what information does it include?

A P45 is an HMRC document given when you leave employment, for your own tax records. It includes your pay-to-date, tax paid, tax code, National Insurance number, leaving date, and employer details, ensuring continuity in PAYE records.

How long does an employer have to issue a p45?

Employers must issue a P45 immediately after an employee leaves, or without unreasonable delay, so the worker’s new employer can apply the correct PAYE tax code.

Can a new employer ask for previous payslips in the UK?

Yes. A new employer may request payslips to confirm salary, deductions, or employment history, though they cannot force you to provide them if you prefer not to.

Why do employers need to issue both P45 and P60 forms?

Employers need to issue both since they have different purposes. A P45 is given when you leave a job, showing pay and tax to date. A P60 is issued annually if you’re employed on 5 April, summarising your total yearly pay and deductions.