This guide takes you through how to find you PAYE income on your digital personal tax account. This is needed for tax return purposes, potentially for mortgage references, and lots of other fun stuff!
The P45 and P60 are needed for completing your tax return. It shows how much income you’ve earned in that employment, in that tax year. A P45 is if you have left employment in the tax year, and a P60 is the end of year summary for an employment or for all employments in the year. Sometimes you might have a P60 that with previous employment on it – this depends on whether the employer has included prior year or prior employer income into their system.
For your tax return you must have the details per employment. Now what I will say is the P60 will show any student loan deducted, and that is key if you are doing self-assessment because you have to earn over a certain amount before student loan is deducted. If it’s deducted from PAYE and you have self-employed income as well, potentially you will have more student loan to pay out. If you don’t know how much you’ve paid out on your student loan and you do your tax return, then you’ll have to pay it over all again, which leads to an overpayment.
Now, unfortunately the P45s don’t actually show any student loan that has been deducted. It just gives a little tick to say people have to continue taking student loan when you change jobs. The only way to find out how much student loan you’ve paid on a job you have left in the tax year is to look at all the individual payslips and add it up, so keep your payslips.
Legally these P45s and P60s must be issued by the employer if they have deducted any taxes from you. If no taxes have been issued then they don’t actually have to issue a P45 or a P60, but most payroll systems now will do it automatically and you can ask for one.
So, we’ve said they’re needed for the tax return, that’s great. Now if you do your own tax return, these fields in the tax return employment section should be populated ready for you. However, if you have a tax agent doing your tax return, they cannot see this data. They have no access to any of it, so you need to send them the P45s and P60s and potentially the payslips to work out student loan. Unfortunately it’s just one of those quirks that tax agents don’t get to see everything (you would have thought a tax agent should do, but no). So just be prepared that you might have a tax agent or accountant that is asking for this information and you sit there and think “why?” There is a way of getting it, but you have to have commercial software and have all the links set up etc., and that increases the fees that an accountant will charge you, so keep your P60s, keep your P45s, keep your payslips until the tax return’s definitely done and that always keep your P45s and P60s for at least seven years.
So, what do we want to do? Well guess what, we want to login into your digital tax account! This will be into your personal tax account, so if you have a setup that automatically goes to your business account, scroll down to the bottom and you’ll be able to go to the personal tax account.
Follow this link to log into your tax account:
Input your government gateway ID, which is 12 digits long, input the password and click sign in.
This person here has PAYE and doesn’t have anything else like some of the screenshots you might have seen on other guides, so it just says what they might have paid in the last two tax years, but they’ve only got PAYE set up because at the moment they are only employed as PAYE.
You want to click on PAYE and this will give you an overview.
Here you can look at what you’ve got for the current year (what your employers think you’re going to pay), you can go and look at whatever you think your tax code might be for the next year if you want to do any planning, or you can check previous tax years. What we’re going to do is check the previous tax year in order to get a complete list of what income you might have had.
I’ve gone for 2019-20, and you’ll see this person has two employments set up:
It will tell you the employer name; in this case I’ve got Happy School Limited and Music Mug Limited. It will say how much your gross pay has been for each of those employments. That is not the end of the story, oh no, no, no! That’s just gross pay. You will probably find that you have had tax deducted, so what we need to do is go and look at exactly how much. So what we want to do now is check the income details that have been sent to HMRC.
I’m only going to look at one of these companies. It’s going to be exactly the same for both of them (well, the figures will be different, but the process is exactly the same). Let’s look at Music Mug Limited.
It shows this person was actually only employed by them and paid by them for one month, and that happened to be April. You can see their taxable income was £1798.69, the income tax paid was £151.20, and National Insurance was £146.81. The figures you will need to provide your accountant if you don’t have a P45 or P60 for Music Mug Limited are the taxable income and the income tax paid. If this person had been employed for more than one month, then there will be a complete list of all the payroll files that that employer has sent to HMRC.
Now, what it does not show you is the PAYE code – which is required for your tax return. If you don’t have any previous years P45s or P60s from the same employer, all you can do is put “unknown” when it comes to writing the PAYE code into your tax return for employment.
That’s the easiest way of pulling your PAYE data. If there is nothing up there or you can’t see anything there, the only other way to get the data for your tax return on PAYE employment is to phone HMRC on 0300-200-3310 and you can ask them to send you a statement of earnings for the year. They’ll gripe because they will turn round and say, “why you haven’t you kept your P45s or P60s”, you’ll have to explain why etc., and then they’ll ask, “why don’t you have access to your online account”. I do know during 2020 quite a lot of firms closed down for various periods of time, so some P45s and P60s were not actually issued, so this is potentially the only place you’re going to get that data.
Let’s have a little browse around your account – here are other things you can look at. You could look at your National Insurance record.
You can look at how much you’ve paid every year. If you’re not sure of your National Insurance number then you can get your letter from here. Or you can view gaps in your record, so let’s just have a quick look at that.
This person has 31 years of contributions (must be old!) and they still have 16 years to contribute before they can potentially retire. You actually only need 35 of full years contributions in order to get the state pension (that is of March 2021). Who knows – it may change in the future. They may say you’re not getting your pension at 68, you’re going to get it at 70 or 75 or 80, so you may end up having more years to contribute.
This page shows if you’ve got tax years there, and if they’re full or not full. If you go on to view details, you can look at see how that tax year is made up. I’m going to pick example years, going back a few years.
You’ll see here for the 2012-13 tax year this person had 52 weeks of self-employment, so a full year. For the 2011-12 tax year this person had some paid employment and a full amount of self-employment.
In the 2009-10 tax year this person had mostly paid employment, but in order to fill the gap they paid for five weeks worth of voluntary contributions. Voluntary contributions will fill up previous years, but you can only go back four years. If you have a year that is not full it should tell you how much you need to pay in order to make up that year of National Insurance. It is not necessarily the Class 3 National Insurance rate, which is something like £15.30 a week (a horrendous amount of money!), so if you are self-employed go for Class 2 and make sure you just pay it all up because it’s only £150/£160.00 a year.
In the personal tax account you can look at what your state pension is going to be:
If you go back to the main menu, you will see a section on pensions. Click through to your state pension forecast; you will then see your pension details as of April 2020, which is the end of the last tax year. This person was only going to get £143.84 per week if they didn’t contribute any more. If they contributed for another seven years, they can get £175.20 per week. If they contributed for more than seven years it will not change their forecast. The only way this person can increase their state pension from this point is if they delay it for a few years (so instead of taking the pension at 68, taking it at 70 or 75 etc.). This is because the government will not be supporting you for the immediate period.
That really is a quick swirl around your personal tax account where you can find your PAYE information. Any problems, as always please feel free to drop me an email.