Your P60 is an important document if you have any PAYE income, even if most of your money comes from self-employment. It summarises the pay you’ve received and the tax deducted in a tax year. Getting it right matters because a tax code error can mean you’ve paid too much tax or too little.

If you are self-employed, you might think it does not affect you. But many self-employed people have side jobs, pensions, or other PAYE income. In these cases, an incorrect tax code on your P60 could still affect your overall tax position and even the calculation of your Self Assessment return. Understanding how P60 tax code errors happen and what to do if you spot one can save you stress and money.

What is a P60?

A P60 is an end-of-year certificate that summarises the pay you have received and the tax and National Insurance contributions you have paid through PAYE (Pay As You Earn) in a  tax year. It covers the period from 6 April to 5 April and is issued by either an employer or pension provider. 

The P60 shows:

• Your total pay for the tax year.
• The total Income Tax deducted.
• The total National Insurance contributions.
• Any statutory payments (such as maternity or sick pay).
• Your final tax code for the year.
• Any student or postgraduate loan deductions.

Employers must provide a P60 to each employee who is on their payroll on 5 April by 31 May following the end of the tax year.

You may need your P60 to claim back overpaid tax, provide proof of income when applying for loans or mortgages, or to help you complete a Self Assessment tax return if required.

I’m self-employed or a company director - should I get a P60?

If you work for yourself as a Sole Trader, you won’t get a P60. That’s because self-employed income is taxed through Self Assessment, not PAYE. Instead of a P60, your taxable profits and the tax you’ve paid are recorded in your Self Assessment tax return.

If you’re a director of a Limited Company and pay yourself a salary through payroll, you will get a P60 for it. HMRC treats directors as employees for PAYE purposes, so any salary you take is reported like any other employee income. You can learn more about when a director is considered an employee in our guide on director’s employment status. Even if most of your income comes from dividends, your PAYE salary must be recorded on a P60.

If you are both self-employed and employed, you will still receive a P60 for any PAYE income. Examples of this would be if you are self-employed and also:

• Have a part-time PAYE job.
• Have a full-time PAYE job and a part-time side hustle.
• Receive a pension that is taxed at source. 

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Understanding tax codes and why they matter

A tax code is a reference that HMRC sends to your employer or pension provider. It tells them how much Income Tax to take from your pay. 

What is a tax code? 

It’s a set of numbers and letters that reflects your personal allowance, and other factors, such as benefits, allowances, and any unpaid tax from previous years. For example, a common tax code in recent years is 1257L. The numbers indicate the amount of tax-free pay you are entitled to before deductions. The letter at the end, in this case an “L”, tells your employer or pension provider that you are entitled to the standard personal allowance.

If the code is wrong, you could end up paying the wrong amount of tax, even if you also file a Self Assessment for your self-employed income. 
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How P60 tax code errors happen.

HMRC issues tax codes based on the information it receives. So P60 tax code errors can happen for a few different reasons, particularly if you have multiple income streams. For example, being both employed and self-employed. 

Reasons why you might see the wrong tax code on your P60

• Old tax codes being carried forward - Sometimes HMRC continues using last year’s code. If your income or circumstances have changed, this can cause overpayment or underpayment.
• Multiple sources of income - Self-employed people may have side jobs or pensions. HMRC may not always account for this correctly, resulting in an incorrect tax code on your P60.
• Incorrect allowances or benefits - Marriage allowance, blind person’s allowance, or benefits in kind from a job may not be included in your code.
• Employer or payroll errors - Employers report income to HMRC. Mistakes in these submissions can lead to the wrong tax code being used.

HMRC’s guidance makes it clear that if a tax code is wrong, it’s usually because the information they hold is incomplete or outdated. They rely on taxpayers to check their codes and report any issues.
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How to spot a tax code error

Even self-employed people need to check their PAYE income carefully. Here’s how to spot P60 tax code errors:

1. Check your tax code

Compare the tax code on your P60 or payslip with what HMRC shows in your personal tax account. If they don’t match or if the code looks unusual, it could indicate a p60 tax code error. HMRC updates codes online regularly, so this is the quickest way to spot any discrepancies.

2. Look at tax deductions

Look at how much tax has actually been taken from your PAYE income. If you’ve paid more or less than expected, it could mean your tax code is wrong. Overpaid tax might be refunded automatically, but underpaid tax could result in a bill when you submit your Self Assessment (if applicable).

3. Consider allowances and benefits

Make sure your tax code reflects any personal allowances, marriage allowance transfers, or benefits in kind you are entitled to. Missing allowances or unaccounted benefits can push you onto the wrong code and affect the tax deducted from your salary or pension.

4. Check for multiple jobs or pensions

If you have more than one source of PAYE income, HMRC assigns your personal allowance to one job (usually your main employment) and adjusts the tax codes on other jobs or pensions accordingly. This ensures the correct overall tax is deducted across all PAYE income.

5. Look for unusual letters

Some letters in your tax code indicate special situations and may signal potential issues:

• BR: All income from this job is taxed at the basic rate, with no personal allowance. Often used for a second job or pension.
• D0: All income is taxed at the higher rate, with no personal allowance.
• D1: All income is taxed at the additional rate, with no personal allowance.
• Emergency codes (e.g., 1257L W1, or 1257L M1): Temporary codes used when HMRC does not yet have full information about your income. They calculate tax on a weekly or monthly basis rather than across the full year.

If you see any of these codes and they don’t reflect your situation, it could mean your tax code is wrong. For example, your main job should usually have your personal allowance (e.g., 1257L), so a BR code on your main salary would indicate you’re overpaying tax.
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Steps to correct an incorrect tax code on your P60

If you’re looking at your P60 and disaster strikes because you spot a pesky incorrect tax code, here’s what to do:

1. Check HMRC records

Log in to your HMRC personal tax account. You can see all your PAYE income and tax codes that HMRC has on record. Make sure the details for all employment and pension income are correct. This is the quickest way to spot P60 tax code errors. 

2. Update information online

If you notice an error, HMRC lets you update your details online. For example, you can correct income amounts, notify them of a new job, or adjust allowances. Once submitted HMRC will then review the information, and, if necessary, issue a corrected tax code.

3. Contact HMRC directly

If you can’t fix your tax code online, contact HMRC by phone or in writing. You should have the following ready:

• Your National Insurance number. 
• Details of your employment(s) or pensions.
• Your current tax code and what you believe it should be.
• Copies of P60s or payslips. 

HMRC will investigate and provide a corrected tax code if needed.

4. Inform your employer or pension provider

Once HMRC issues a new code, your employer or pension provider will apply it to your next pay. Always check your next payslip to make sure the correct tax code is being used.

5. Consider the impact on your Self Assessment 

If you are also self-employed or a Limited Company director, remember that Self Assessment includes all of your income. From PAYE, pensions and any self-employed earnings. A corrected tax code may change your total tax liability or refund. Make sure your Self Assessment tax return is updated with all income and tax already paid to avoid overpaying or underpaying. 

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What about underpaid or overpaid tax?

An incorrect tax code on your P60 can result in you not paying the correct amount of tax. So what happens in these cases?

Overpayment of tax

If you’ve paid too much tax because of a P60 tax code error, HMRC usually refunds overpaid tax directly. Or they'll adjust your tax code in the new tax year. 

Underpayment of tax

HMRC collects underpaid tax via future PAYE deductions or through your Self Assessment bill.

If you have both PAYE and self-employed income, it’s particularly important to reconcile the two so you don’t overpay or underpay on your tax. Keeping accurate records makes this easier. 
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Preventing tax code errors

Even self-employed people with side jobs or company director salaries can reduce the risk of errors by:

• Checking your tax code regularly. Log in to your HMRC personal tax account to ensure all codes are correct.
• Notify HMRC of any changes in income, employment, pensions, or benefits when they happen. 
• Submit P45s to new employers and keep payroll details correct.
• Keeping clear records where you track income, allowances, benefits, and correspondence with HMRC.
• Understanding multiple incomes. Make sure your main job has the correct personal allowance and secondary PAYE income uses appropriate codes (BR, D0, etc).
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Common Questions for Self-Employed People

Can self-employed people have P60 tax code errors?

Yes. Even a small amount of PAYE income, such as a part-time job or pension, can be affected by an incorrect tax code and impact your overall tax position.

How long does it take to fix a tax code?

Once HMRC receives the correct information, they usually update the code within a few weeks. Employers then apply it to your next pay.

Can I claim overpaid tax from previous years?

Yes. HMRC allows claims for overpaid tax going back up to four years.

Who is responsible for correcting the code?

HMRC issues the codes, but your employer applies them. You need to ensure HMRC has accurate information to avoid errors.

What if I ignore a tax code error?

Ignoring it can lead to overpayment or underpayment, affecting your cash flow or leaving you with an unexpected bill.

Keeping your tax in check

So while a P60 might seem like just another piece of tax paperwork, it can have a real impact on your finances. Even if you’re mainly self-employed, any PAYE income—from a part-time job, a pension, or a director’s salary—can affect the tax you owe or the refund you get.

Catching a P60 tax code error doesn’t just save money, it saves headaches too. By keeping an eye on your tax codes, keeping a clear record of your income, and keeping your information up to date with HMRC, you can be confident that your tax is sorted. A little attention now goes a long way in making sure your money is right where it should be. 

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