1st Contact highlights the importance to keep taxpayers informed about tax return guidelines and tax developments. Here is some basic and useful information that you need to know about tax and taxation, tax forms and filing tax returns.
If you are an employee, your employer is required to give you certain documents such as a P45 and P60. In the case where you receive benefits or expenses, the employer should send a P11D to HMRC. There are so many other forms and form codes that every taxpayer should know. So, what are these forms for, when and how do you use them?
P45 is issued to an employee when he/she ceased working for a certain employer. This document shows the employee’s pay record and the tax deductions made for the current tax year. This document also shows important reference numbers and information such as the National Insurance Number, tax code and PAYE (Pay As You Earn) reference number, total earnings for the current tax year and last employment date. A P45 form is made up of four parts. The first part is sent by the employer to HMRC while the remaining three are retained by the employee. Parts 2 and 3 should be handed by the employee to the new employer and Part1A should be kept by the employee as their own personal record. It is important for an employee leaving a company to receive the P45 form and if this is not automatically given by the employer, they should follow it up. The P60 is commonly known as the end of year tax certificate. This document contains the summary of the total employee pay and the tax deductions within the tax year. Like the P45, a P60 should be given by the employer to the employee at the end of every tax year. If this is not provided by the employer, the employee should ask for it, that is, if he/she is still working for the employer on April 5 of the same tax year.
The P60 form can also be used as proof of income if one wishes to apply for a loan, for tax claims and application of tax credits. In the event that an employee had lost the P45, a P46 form should be completed by the employee and submitted to HMRC for issuance of a new employment code number. This form is also used if an employee is working for the first time, on a temporary basis or as a student worker.
P11D form contains the expenses and benefits return. This details all the benefits or expenses a specific employer has paid to every employee earning more than £8,500 for the last tax year. The employer must complete and submit the P11D form to HMRC by July 6 of every tax year. A copy of the P11D must not necessarily be given to the employee but it is the employer’s responsibility to inform the employee about the details of what is included in the P11D form. At any rate, the best thing to do is provide a copy to the employee. If an employee earns less than £8,500, a form P9d should be used.
Other tax forms include P35 which contains the employers’ end of year tax return. A P11 or a deduction’s working sheet. For personal tax return, a self assessment tax return form must be completed and submitted to the HMRC.
For more information on taxation and tax forms guidelines, one may get in touch with 1st Contact, they will be happy to provide help and assistance.
1st Contact Accounting offers Specialist tax services to contracting professionals these services include: Contractor Accounting, Personal Tax for Contractors, Limited Companies for Contractors and Contractor Financial Advice.