Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Readers Forum: Long service award

25 May 2021
Issue: 4793 / Categories: Forum & Feedback
Income tax exemption on retirement gift.

While reviewing our client’s latest records we spotted that they have given a gift on retirement to a long-standing employee.

If the employment has lasted more than 20 years are we able to claim exemption from income tax charges for the employee as a long service award even though the gift is on retirement?

The value of the gift is small so would be easily covered by the £50 a year of service limit.

My client company took over the business five years ago so I am assuming that the employment with the previous owner of the business will count towards long service under TUPE arrangements. Is that correct?

I look forward to hearing from readers.

Query 19 748  – Retiree.

If the gift is money it is taxable under PAYE as earnings.

Retiree refers to a ‘gift’ being made on retirement and to its value. I...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon