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A Glossary of HM Revenue & Customs, Tax Codes & some of the ‘P’ forms Terms

HM Revenue & Customs (HMRC)

HM Revenue & Customs (or HMRC) was created by the merger of the Inland Revenue and Her Majesty’s Customs and Excise in 2005. It deals with the collection of tax, national insurance contributions and VAT.

Tax code

Each employee has a tax code to specify the way that PAYE income tax should be calculated and deducted from their wages. If an employee has more than one job, they can make a request to HMRC to split their tax allowance between employments, this can result in them having a separate tax code with each employer.

P6: Tax code notice

P6 tax coding notices are issued to employers by HM Revenue & Customs to show tax code changes for their employees. They are usually generated by HMRC where they have reviewed an employee’s tax record & current situation or after receiving a completed P46/Starter Checklist from the Employer.

For further information on tax codes please see the following link: https://www.gov.uk/tax-codes

P45: Details of Employee Leaving Work

A P45 is a form that is completed by an employer and given to an employee when they leave. The employee should then give the P45 to their new employer when they start a new job. The new employer uses the information from the P45 to ensure that the correct amount of tax is deducted.

P46: Employee without a Form P45

The P46 was replaced with the “starter checklist”, this is a form to be filled in for any employee who is a new starter and has no P45 or has lost their P45. There is a paper and online version of this form. Please see link to these - https://www.gov.uk/government/publications/paye-starter-checklist

P 60: End of Year Certificate

At the end of each tax year, employers must give a P60 to each of the employees who were working for them at the end of the year. A P60 includes totals of the pay, tax and national insurance accumulated during the tax year.

P11D

Employers must use a P11D to tell HMRC about the value of any benefits in kind they've given to employees, including directors the tax year. This means benefits or expenses that effectively increase an employee’s income - such as a company car, private medical insurance or interest free loans. The employee pays tax on most benefits whilst the employer pays Class 1A National Insurance Contributions. A copy of the P11D must be provided to each employee affected, as this will be needed by them if they need to complete a self-assessment tax return.

RTI - Real Time Information

Real Time Information (RTI) is an improved way of reporting, it is designed to make PAYE submissions more efficient. RTI involves information being sent to HMRC every time employees are paid in real time.

EPS - Employer Payment Summary

An RTI submission used to claim employment allowance, reclaim statutory maternity, paternity, adoption payments or CIS deductions and to pay Apprenticeship Levy where due.

FPS - Full Payment Submission

An RTI submission informing HMRC about payments and deductions an employer has made to their employee’s, this is processed at the time of payroll and should be submitted before the employees are paid.

FPS Adjustment – Full Payment Submission

Adjustment An RTI submission submitted to HMRC after a FPS to make an amendment.

SSP1

Employers must fill in this form when an employee is not entitled to Statutory Sick Pay (SSP) or when their SSP entitlement is coming to an end.

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