Q. What are the rules for issuing P60 forms and P45 forms for my employees?

A. If you are an employer, you have a statutory duty to provide your employees with a copy of their P60 at the end of each tax year. If an employee stops working for you, you will need to issue them with a P45.

You can use your own payroll software but if you do not have your own payroll software, Basic PAYE Tools is free payroll software from HM Revenue and Customs (HMRC) for businesses with fewer than 10 employees.

This software allows you to perform most payroll tasks, including working out the tax and National Insurance for your employees and sending this information to HMRC.

If your payroll software does not produce the forms, you can order the forms online via the HMRC website. You can’t download blank P45 and P60 forms.

You must give your employees who are working for you on the last day of the tax year (April 5) a P60 by May 31.

The P60 summarises the employee’s total pay and deductions for the year.

If you distribute P60s and then discover that alterations need to be made, you will need to give employees a new P60 marked ‘replacement’ which can be a paper or electronic version, or a letter confirming the change.

These requirements are in addition to your other filing deadlines related to your payroll and later in the year you will need to deal with the reporting of expenses and benefits to HMRC through P11D forms.