25 year service award

nox118

cazbarfeatures wrote: »

Hi,

Ok, so I have been working for my company for 25 years in June this year and I am entitled to a £250 award.

The company tells me that I have to buy something to that value, then give them the receipt and they will reimburse me.

I had hoped to get a gift card but apparently that is looked at as a cash gift and tax/nics will be applicable hence why they
company won't just give me the cash in my wages.

I need some suggestions because I don't really have anything in mind to buy for that value and I would rather put it towards bills/food/petrol
to be honest.

what do you think?

thanks

Refunding you cash for your purchase would be treated by HMRC as taxable income as you have spent your money and then your company gives you cash.
The company buying you an item/s up to £250 is not taxable (the company should be able to claim the VAT back).
From my reading and my companies reading of the tax law, gift cards (which I got) are none cash rewards and are not taxable, as they cannot be exchanged for cash (e.g. a cash voucher).

For 2003/04 onwards, the concession has been replaced by a statutory exemption in Section 323 ITEPA 2003. The conditions for exemption are as follows:

• the award must be made to mark a period of not less than 20 years service with the same employer (see EIM01504) and
• it must be in a form that satisfies the condition in Section 323(3) (broadly, it must be something other than money) (see EIM01502) and
• the taxable value of the award (before applying the exemption) must not be more than £50 for each year of service (see EIM01501) (£20 per year of service if the award was made on or before 12 June 2003).

As regards multiple awards, see EIM01503.

If a non-cash award fails to satisfy the conditions for the exemption, or exceeds the £50 per year of service limit, the employer may be prepared to pay the tax due under a PAYE Settlement Agreement. Cash awards do not qualify for exemption at all, and the employer should operate PAYE.
Section 323(3) ITEPA 2003

The main conditions for exemption under Section 323 ITEPA 2003 are set out in EIM01500. One of the conditions is that the award must be in a form that satisfies the condition in Section 323(3). That is, the award must be in the form of:

• tangible moveable property, or
• shares in the company that employs the person receiving the award, or in a company in the same group as the employer, or
• any other benefit except:

• a payment
• a cash voucher
• a credit token
• securities
• shares other than those mentioned above and
• an interest in or rights over securities or shares.

The exclusion of payments and cash vouchers rules out cash and cheque payments, National Savings Certificates, premium bonds and so on. Shares and securities are excluded unless they fall within the second bullet above. Subject to that, and to the monetary limit in EIM01501, most non-cash awards are likely to qualify for the exemption.

BristolBob

FireWyrm wrote: »

I'd have a chat with them....£250 seems a touch miserly frankly, one wonders what would happen if you indicated your displeasure.

You would likely be told to be grateful for the free gift.

Danni-R

£250 is still £250.

How about a nice digital camera? do you have hobbies that you could get them to fund? How about a laptop?

Essentially its a nice free gift! How about a red letter day thing?

simeyb

Danni-R wrote: »

£250 is still £250.

How about a nice digital camera? do you have hobbies that you could get them to fund? How about a laptop?

Essentially its a nice free gift! How about a red letter day thing?

At last a nice suggestion!!! Why not, with this £250 that you didn't have before, or budget on having, spend it on something nice for yourself - all of us on here, by dint of being on here, lead miserly, don't need so can't have, lives - just but yourself something like a camera, or hi-fi or whatever floats your boat and enjoy it!

MrsPorridge

What about buying some jewellery - good quality. You can then keep it (or wear it as well) for a rainy day? It may prove a good investment and something you could pass on?

ampafc

Wow.

Even when people get something for nothing, people on MSE still feel the need to complain. This comment is not just directed to the OP.

For those saying that GBP 250 is not enough for 25 years service - maybe people should thank the employer for giving the OP a job for 25 years?

cb1979

You are lucky to get anything at all, I used to work for the largest Airline in the UK and the switched to giving only a certificate for 25 and 35 years service

nox118

cb1979 wrote: »

You are lucky to get anything at all, I used to work for the largest Airline in the UK and the switched to giving only a certificate for 25 and 35 years service

My Union puts the increase in long service award in the salary negotiations every year, we get an increase every 5 years or so.

But congrats to the OP for doing 25 years with the same company.