Join BKN

Join BKN
Join BKN

Ideal Schools

Join BKN

The Book-keepers Forum -> VAT, Payroll & Tax -> p45's & p6o's
Post Info TOPIC: p45's & p6o's
Kate1


Veteran Member

Status: Offline
Posts: 30
Date:
p45's & p6o's
 

Hi,

I'm hoping someone can help clarify something for me.  I do the payroll for a small business and I'm having a disagreement with one of the employees about what tax documents they can expect for the tax year 2011/12.

The same business changed company names throughout the tax year, so from April to May 2011 the first company ended and the second company started from June 2011.  A P45 was issued to the employee for the period April to May 2011 and I've told the employee that they will receive a P60 for the period June 2011 to end tax year 2012 - so they will have a P45 and a P60 for the tax year.

The employee believes that they should have two P60's as they are arguing that a P45 is not an acceptable document of earnings for the year.  I just want to confirm that my understanding is correct - the P45 is an acceptable document of earnings and a P60 won't be issued as well as the P45 for the first company.

Hope someone can clarify for me!!

Many thanks,

Kate

 



__________________
Tom McClelland


Senior Member

Status: Offline
Posts: 319
Date:
 

You are correct and your employee is wrong. A P60 is only given to employees who were employed at the end of the year.

If your employee doesn't believe you (or me) they might believe HMRC I suppose:

http://www.hmrc.gov.uk/paye/payroll/year-end/checklist.htm#8



-- Edited by Tom McClelland on Saturday 21st of April 2012 09:53:01 PM

__________________
Try out our Payroll Software, but don't listen to us, Listen to our users.

Taylor1


Member

Status: Offline
Posts: 9
Date:
 

You are correct they only recieve a P60 if they are still employed at the end of the year not in between as their P45 covers this.

__________________
Kate1


Veteran Member

Status: Offline
Posts: 30
Date:
 

thankyou so much for confirming this, I was getting worried I was wrong! I think the confusion by the employee is that on the P60 there is a section for 'previous employment', however I have never seen this section used before, does anyone know when you would use this section?

__________________
Stardoe


Guru

Status: Offline
Posts: 1145
Date:
 

Hi Kate,

I am assuming this section would be used if an employee started with you in the middle of a tax year. You would need to put in the details from their P45 (if they had one) that they gave you for their previous employment, thus giving them a total tax paid for the tax year.

Someone please correct me if I'm wrong!

Pauline

__________________

Pauline
Don Tax


Guru

Status: Offline
Posts: 1296
Date:
 

Yes, Pauline's right.  The section would contain the P45 figures given by the first company in June 2011 in this case.

Kate, you can point out to the employee that the document for earnings throughout the year is the total of 'previous employment' and 'this employment' given on the P60.



__________________
Kate1


Veteran Member

Status: Offline
Posts: 30
Date:
 

Thanks for your replies, but now I'm lost again!

So, is it not ok for the employee to have the P45 for the first company and then the P60 for the second company (with the P60 only including the earnings for 'this employment')? I didn't do the payroll at the time of the first company, so I don't have the Employers P45, although the Employee has their P45 copy. So, I don't see how I can fill in the 'previous employment' on the P60, is my way of thinking correct?

Is there two ways it can be done - the employee can have the P45 for the first company and the P60 for the second company (with the P60 only including the earnings for 'this employment') OR they can have 1 P60 which will contain the earnings for 'previous employment' and 'this employment' ?

Thanks again,
Kate

__________________
Tom McClelland


Senior Member

Status: Offline
Posts: 319
Date:
 

The P60 includes the previous earnings if the employee gave you a P45(3) when they started with you, or if subsequently HMRC has sent you a P6 with previous earnings on it.

__________________
Try out our Payroll Software, but don't listen to us, Listen to our users.
Stardoe


Guru

Status: Offline
Posts: 1145
Date:
 

Hi Kate,

The employee will have 1 P45 from the previous company and 1 P60 from the new company. Have you not seen the P45 from the previous company at all? You will have needed to put the total pay and total tax from this into your payroll software when they started with the new company, otherwise your P60 will not be correct. When you produce the P60 at year end the software will take the figures from the P45 and put them in the "previous employment" boxes and pay and tax from current employment in the "this employment" boxes, and then total them up in the boxes below that to make total figures for the tax year.

The employee can not have a P60 for the previous company as P60s are only produced at year end and they were not employed by that company at year end. The P60 must include total figures for the tax year, not just tax and pay in this employment.

I hope this makes things a little clearer.

Pauline







__________________

Pauline
Kate1


Veteran Member

Status: Offline
Posts: 30
Date:
 

thankyou Pauline, I get in now! Many thanks

__________________
Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.
The Book-keepers Forum -> VAT, Payroll & Tax -> p45's & p6o's
Post to Facebook Tweet this page Post to Digg Post to Del.icio.us
Members Login
Username 
 
Password 
    Remember Me  

BKN Special Offers

 

Resources

Careers & Qualifications  Start Up Essentials  Marketing Centre   Software Reviews
What is a book-keeper  Register as Self-Employed Networking  Software Blog
 Home Study Courses  Money Laundering Local Accountants  
 Qualifications/ Associations  Data Protection Direct Marketing  
 Franchises  Registering as an agent  Telemarketing  
 College / Night School  PI Insurance  Directories  
 Recruitment  Stationery  Google  
     Twitter  
     Volunteer Work  

 

 

 

 

  		 

  		   

 

Copy Right Bookcert Limited