What Is a P60 and Why Does It Matter?
If you employ staff, 31 May is a date you should have firmly in your diary every year. That is the deadline by which all employers must provide their employees with a P60 — and missing it can result in HMRC penalties.
A P60 is a summary of an employee’s pay and deductions for the full tax year (6 April to 5 April). It shows total earnings, income tax deducted, National Insurance contributions, and any statutory payments such as maternity or sick pay. Employees need their P60 to complete a Self Assessment tax return, claim tax refunds, apply for mortgages, and as proof of income for various official purposes.
The P60 Deadline: 31 May
You must give every employee who was on your payroll on 5 April a P60 by 31 May following the end of the tax year. For the 2025/26 tax year, that deadline is 31 May 2026.
Key points to remember:
- Only employees still employed on 5 April need a P60 — those who left before that date receive a P45 when they leave instead
- You can issue P60s on paper or electronically, provided employees can access and print them
- You do not send a copy to HMRC — P60s are for employees only
- If you use payroll software, it should generate P60s automatically once you complete your final Full Payment Submission (FPS) for the year
What Happens If You Miss the Deadline?
Failing to provide P60s on time can result in a penalty of up to £300 per P60, with a further £60 per day for continued non-compliance. More practically, it causes real problems for employees who need the document for mortgage applications, tax returns, or benefits claims. The reputational damage to your business can be significant, particularly in small teams where trust matters.
What Is a P11D — and Why Is July Important?
Once you have dealt with P60s, the next deadline to prepare for is 6 July, when P11D forms are due. A P11D reports any benefits in kind and expenses you have provided to employees or directors that were not put through the payroll.
Benefits in kind are non-cash perks provided to employees that have a monetary value. Common examples include:
- Company cars and fuel provided for private use
- Private medical or dental insurance
- Interest-free or low-interest loans above £10,000
- Living accommodation provided by the employer
- Gym memberships, subscriptions, or club memberships
- Vouchers and non-cash gifts above the trivial benefit threshold
P11D Key Dates and Deadlines
| Action | Deadline |
|---|---|
| Submit P11D forms to HMRC | 6 July 2026 |
| Give copies to employees | 6 July 2026 |
| Pay Class 1A National Insurance on benefits | 22 July 2026 (electronic) / 19 July 2026 (cheque) |
You submit P11D forms online through HMRC’s PAYE Online service or via payroll software. If you have no benefits to report, you do not need to submit a nil return — but if HMRC expects a return from you based on previous years, it is good practice to notify them.
Payrolling Benefits: An Alternative to P11Ds
Many employers are switching to payrolling benefits — a system where the value of benefits in kind is added to an employee’s pay each month and taxed through the payroll in real time, rather than being reported at year end via a P11D.
From April 2026, payrolling benefits became mandatory for most employers, which means many businesses will no longer need to submit P11Ds for benefits going forward. However, if you have not yet registered for payrolling, you may still need to submit a P11D for the 2025/26 tax year. It is important to check your position with your accountant.
Payroll Year-End Checklist for Employers
Here is a practical checklist to help you close out the payroll year cleanly:
- Submit your final Full Payment Submission (FPS) — mark it as the final submission for the year
- Submit an Employer Payment Summary (EPS) if needed — to declare any statutory payments you have recovered
- Issue P60s to all employees still employed on 5 April — deadline: 31 May
- Identify all benefits in kind provided during the year that were not payrolled
- Prepare and submit P11D forms for each affected employee — deadline: 6 July
- Calculate and pay Class 1A NIC on the total value of benefits reported — deadline: 22 July (electronic payment)
- Update employee tax codes for the new tax year if you have received notifications from HMRC
- Review your payroll software settings — update any new tax rates, thresholds, or National Minimum Wage rates that apply from April
Common Mistakes to Avoid
Payroll year-end catches many small employers out. Here are some frequent errors:
- Forgetting to mark the final FPS — HMRC expects confirmation that the payroll year has ended
- Omitting directors from P11Ds — benefits provided to company directors must be reported, not just to employees
- Miscalculating car benefit values — the taxable benefit for company cars is based on list price and CO2 emissions, not the cost to the employer
- Missing trivial benefits rules — gifts or perks worth £50 or less per occasion (with a £300 annual cap for directors) may be exempt from reporting
- Not keeping records — HMRC can enquire into payroll and benefits records going back several years
How Westridge Accountants Can Help
Payroll compliance can feel overwhelming, especially when you are running a business at the same time. At Westridge Accountants, we manage payroll year-end for a wide range of clients — from sole traders with a single employee to limited companies with larger teams. We handle everything from final FPS submissions and P60 generation to P11D preparation and Class 1A NIC calculations.
We also advise on whether payrolling benefits makes sense for your business going forward, helping you simplify your year-end process and stay ahead of HMRC’s requirements.
Contact us at info@westridgeaccountants.co.uk or visit www.westridgeaccountants.co.uk — available 7 days a week, 8am to 10pm.
This article is for general guidance only and does not constitute personalised tax advice. Tax rules can change and individual circumstances vary. Please contact Westridge Accountants for advice tailored to your specific situation. Westridge Accountants Ltd is regulated by AAT and supervised by AAT for Anti-Money Laundering purposes.
Need help with payroll, P60s or P11Ds? Our payroll services team in Hayes is here to help — contact us today.
