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P60 if earnings below LEL?

Do we need to issue P60 form if the earnings are below the Lower Earnings Limit

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Hi,

Do we need to issue P60 form if the earnings are below the Lower Earnings Limit for NI? It is a sole director company, he has drawn 3k over the year and we want to account it as salary, but he has issued himself no payslips or P60. 

Thank you for your help

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RLI
By lionofludesch
15th Oct 2018 09:08

No - strangely, you don't have to issue a P60. I've got a few clients with small private pensions who get a letter instead. I've no idea how that helps anyone !

But you say you "want to account it as salary". Was it salary ? Or something else ?

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Replying to lionofludesch:
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By petia_kit
15th Oct 2018 09:23

Thank you. Yes, in substance it was salary - because the director has done work for the company and his intention was for the drawings to be salary up to the tax efficient limit.

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Replying to lionofludesch:
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By andy.partridge
15th Oct 2018 12:20

Sounds suspiciously like another Dr Who companion in the TARDIS.

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By David Heaton
15th Oct 2018 14:50

An employer only needs to issue a P60 if it has deducted any tax in the year and the employee is still in the job on 5 April. Reg 67 PAYE Regs. However, even if no tax has been deducted, a P60 is still required if the earnings were sufficient to trigger a credit of NICs (ie, above the LEL, but below the ET) or an actual payment of NICs without a PAYE liability. Para 9, Sch 4 NIC Regs. So, with earnings of £3k for a director, who has an annual EP for NICs, assuming his PAYE code was high enough to cover the earnings, no P60 is needed. Has he ever been paid an amount that's taxable or NICable by this company? If yes, the employer should be in RTI, so the P60 would be fairly irrelevant, as both he and HMRC would already know about his earnings.

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Replying to David Heaton:
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By petia_kit
16th Oct 2018 07:45

Thank you very much for the detailed answer, appreciated!

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