Those bits of paper are really important

It is sometimes difficult for me to persuade clients the importance of keeping copies of P60's, P45's and letters from their employers, especially about redundancy payments.


I have had a couple of recent cases that emphasis the problem:
The first is a story of a redundancy payment, P45 and a final bonus were not clear and missing information meant it was not clear what the figure on the P45 was made up of as the client had not retained payslips. The result was we didn’t get the tax return right. HMRC picked this up and launched an investigation where they found the client negligent in submitting an incorrect tax return.

My second is a client being chased for a late 2008 tax return. The client was annoyed that they should be asked to complete a return as they argued they were all PAYE. This is a common mistake as the client’s affairs were complex. There were two private pensions being received, state pension and change of job and they were well into the 40% tax bracket. The client was also missing many P60’s. Once we had obtained all the information they actually had a fairly substantial tax bill because the employer was using a BR tax code which would not collect any 40% tax.

So my advice is to keep all your payslips for a couple of years. Make sure you get and keep copies of P45’s ( them for you get if you leave a job) the P60 ( the form you get each April when you are in a job or are in receipt of a pension) the P11D ( the form you get each April to June) from your employer if you have a company car, medical insurance or other benefit from your employer.


These forms are important.